Full text of Federal Reserve Bulletin : August 2000
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Volume 86 • Number 8 • August 2000
Federal Reserve
BULLETIN
Board of Governors of the Federal Reserve System, Washington, D.C.
Table of Contents
539 MONETARY
CONGRESS
POLICY REPORT
TO THE
The impressive performance of the U.S. economy persisted in the first half of 2000 with
economic activity expanding at a rapid pace.
Overall rates of inflation were noticeably higher,
largely as a result of steep increases in energy
prices. The remarkable wave of new technologies and the associated surge in capital investment have continued to boost potential supply
and to help contain price pressures at high levels
of labor resource use. At the same time, rising productivity growth—working through its
effects on wealth and consumption, as well as
on investment spending—has been one of the
important factors contributing to rapid increases
in aggregate demand that have exceeded even
the stepped-up increases in potential supply.
Under such circumstances, and with the pool of
available labor already at an unusually low level,
the continued expansion of aggregate demand in
excess of the growth in potential supply increasingly threatened to set off greater price pressures. Because price stability is essential to
achieving maximum sustainable economic
growth, heading off these pressures has been
critical to extending the extraordinary performance of the U.S. economy. To promote balance
between aggregate demand and potential supply
and to contain inflation pressures, the Federal
Open Market Committee (FOMC) took additional firming actions this year, raising the
benchmark federal funds rate 1 percentage point
between February and May.
566 INDUSTRIAL PRODUCTION AND
UTILIZATION FOR JUNE 2000
CAPACITY
Industrial production rose 0.2 percent in June,
to 144.6 percent of its 1992 average, after gains
of 0.5 percent in May and 0.8 percent in April.
The rate of capacity utilization for total industry edged down in June to 82.1 percent, a level
about even with the 1967-99 average.
569 STATEMENTS
TO THE
CONGRESS
Laurence H. Meyer, member, Board of Governors, explains the rules recently proposed by
the Federal Reserve Board and the Department
of the Treasury to allow financial holding companies to engage in merchant banking activities
under the Gramm-Leach-Bliley Act and states
that the interim rule and the proposal would
allow merchant banking to continue to develop
along the lines already evident in the industry
and in the manner intended by the Congress,
while at the same time attempting to address the
boundaries between merchant banking and the
mixing of banking and commerce. Further, he
testifies that the rule seeks responsibly to come
to grips with the very real safety and soundness
risks to an insured depository affiliate of both a
financial holding company that engages in merchant banking and a bank holding company that
invests in equities using existing authorities
(Testimony before the Subcommittee on Capital
Markets, Securities and Government Sponsored
Enterprises of the House Committee on Banking
and Financial Services, June 7, 2000. Governor
Meyer presented identical testimony before the
Subcommittee on Financial Institutions and the
Subcommittee on Securities of the Senate Committee on Banking, Housing, and Urban Affairs
on June 13, 2000).
577 Patrick M. Parkinson, Associate Director, Division of Research and Statistics, Board of Governors, presents the Board's views on legislation
to modernize the Commodity Exchange Act
(CEA) and states that the Board continues to
believe that legislation to modernize the CEA
is essential if our derivatives markets are to
remain innovative and competitive internationally. He states further that although some difficult issues remain unresolved, the proposed
legislation (H.R. 4541) represents significant
progress (Testimony before the Subcommittee
on Risk Management, Research, and Specialty
Crops of the House Committee on Agriculture,
June 14, 2000).
579 Alan Greenspan, Chairman, Board of Governors, presents the Board's views on the Commodity Futures Modernization Act of 2000
(S. 2697) and testifies that this bill reflects a
remarkable consensus on the need for legal certainty for OTC derivatives and regulatory relief
for U.S. futures exchanges, issues that have long
eluded resolution. He states further that these
provisions are vitally important to the soundness and competitiveness of our derivatives markets in what is an increasingly integrated and
intensely competitive global economy (Testimony before the Committee on Agriculture,
Nutrition, and Forestry of the Senate Committee
on Banking, Housing, and Urban Affairs,
June 21, 2000).
582
ANNOUNCEMENTS
Federal Open Market Committee directive.
Chairman Greenspan sworn in for fourth fouryear term.
eral funds rate by Vi percentage point to a level
of 6V2 percent. The Committee also indicated
that the economic risks remained weighted
toward rising inflation.
593 LEGAL
DEVELOPMENTS
Various bank holding company, bank service
corporation, and bank merger orders; and pending cases.
A1 FINANCIAL
AND BUSINESS
STATISTICS
These tables reflect data available as of
June 28, 2000.
A 3 GUIDE TO TABULAR
PRESENTATION
A4 Domestic Financial Statistics
A42 Domestic Nonfinancial Statistics
A50 International Statistics
A 6 3 GUIDE TO STATISTICAL
SPECIAL TABLES
RELEASES
A78 INDEX TO STATISTICAL
TABLES
Issuance of examination guidance on equity
investment and merchant banking.
A 8 0 BOARD OF GOVERNORS
AND
Interagency request for comment on proposed
standards for customer information security.
A 8 2 FEDERAL OPEN MARKET COMMITTEE
STAFF; ADVISORY
COUNCILS
Joint agency issuance of revised suspicious
activity report form.
A84 FEDERAL
Enforcement actions.
A86 MAPS OF THE FEDERAL
Proposed revisions to the official staff commentary to Regulation E.
Publication of the June 2000 update of the Bank
Holding Company Supervision Manual.
587 MINUTES OF THE MEETING OF THE
FEDERAL OPEN MARKET
COMMITTEE
HELD ON MAY 16, 2000
At this meeting, the Committee voted to tighten
reserve conditions sufficiently to raise the fed-
RESERVE
A88 FEDERAL RESERVE
AND OFFICES
BOARD
STAFF
AND
PUBLICATIONS
RESERVE
BANKS,
AND
SYSTEM
BRANCHES,
PUBLICATIONS COMMITTEE
Lynn S. Fox, Chair • Jennifer J. Johnson • Karen H. Johnson • Donald L. Kohn • Stephen R. Malphrus
• J. Virgil Mattingly, Jr. • Dolores S. Smith • Richard Spillenkothen • Richard C. Stevens • David J. Stockton
The Federal Reserve Bulletin is issued monthly under the direction of the staff publications committee. This committee is responsible for opinions expressed
except in official statements and signed articles. It is assisted by the Economic Editing Section headed by S. Ellen Dykes, the Graphics Center under the direction
of Christine S. Griffith, and Publications Services supervised by Linda C. Kyles.
Monetary Policy Report to the Congress
Report forwarded to the Congress on July 20, 2000
MONETARY
ECONOMIC
POLICY AND THE
OUTLOOK
The impressive performance of the U.S. economy
persisted in the first half of 2000 with economic
activity expanding at a rapid pace. Overall rates of
inflation were noticeably higher, largely as a result
of steep increases in energy prices. The remarkable
wave of new technologies and the associated surge in
capital investment have continued to boost potential
supply and to help contain price pressures at high
levels of labor resource use. At the same time, rising
productivity growth—working through its effects
on wealth and consumption, as well as on investment
spending—has been one of the important factors
contributing to rapid increases in aggregate demand
that have exceeded even the stepped-up increases
in potential supply. Under such circumstances, and
with the pool of available labor already at an unusually low level, the continued expansion of aggregate
demand in excess of the growth in potential supply
increasingly threatened to set off greater price pressures. Because price stability is essential to achieving
maximum sustainable economic growth, heading off
these pressures has been critical to extending the
extraordinary performance of the U.S. economy.
To promote balance between aggregate demand
and potential supply and to contain inflation pressures, the Federal Open Market Committee (FOMC)
took additional firming actions this year, raising the
benchmark federal funds rate 1 percentage point
between February and May. The tighter stance of
monetary policy, along with the ongoing strength of
credit demands, has led to less accommodative financial conditions: On balance, since the beginning of the
year, real interest rates have increased, equity prices
have changed little after a sizable run-up in 1999, and
lenders have become more cautious about extending
credit, especially to marginal borrowers. Still, households and businesses have continued to borrow at a
rapid pace, and the growth of M2 remained relatively
robust, despite the rise in market interest rates. The
favorable outlook for the U.S. economy has contributed to a further strengthening of the dollar, despite
tighter monetary policy and rising interest rates in
most other industrial countries.
Perhaps partly reflecting firmer financial conditions, the incoming economic data since May have
suggested some moderation in the growth of aggregate demand. Nonetheless, labor markets remained
tight at the time of the FOMC meeting in June, and it
was unclear whether the slowdown represented a
decisive shift to more sustainable growth or just a
pause. The Committee left the stance of policy
unchanged but saw the balance of risks to the economic outlook as still weighted toward rising
inflation.
Monetary Policy, Financial Markets,
and the Economy over the First Half of 2000
When the FOMC convened for its first two meetings
of the year, in February and March, economic conditions in the United States were pointing toward an
increasingly taut labor market as a consequence of
a persistent imbalance between the growth rates of
aggregate demand and potential aggregate supply.
Reflecting the underlying strength in spending and
expectations of tighter monetary policy, market interest rates were rising, especially after the century date
change passed without incident. But, at the same
time, equity prices were still posting appreciable
gains on net. Knowing that the two safety valves that
had been keeping underlying inflation from picking
up until then—the economy's ability to draw on the
pool of available workers and to expand its trade
deficit on reasonable terms—could not be counted on
indefinitely, the FOMC voted for a further tightening
in monetary policy at both its February and its March
meetings, raising the target for the overnight federal
funds rate 25 basis points on each occasion. In related
actions, the Board of Governors also approved
quarter-point increases in the discount rate in both
February and March.
The FOMC considered larger policy moves at its
first two meetings of 2000 but concluded that significant uncertainty about the outlook for the expansion
of aggregate demand in relation to that of aggregate
supply, including the timing and strength of the
economy's response to earlier monetary policy tight-
540
Federal Reserve Bulletin • August 2000
Selected interest rates
NOTE. The data are daily. Vertical lines indicate the days on which the
Federal Reserve announced a change in the intended funds rate. The dates on the
horizontal axis are those on which either the FOMC held a scheduled meeting or
a policy action was announced. Last observations are for July 17, 2000.
enings, warranted a more limited policy action. Still,
noting that there had been few signs that the rise in
interest rates over recent quarters had begun to bring
demand in line with potential supply, the Committee
decided in both instances that the balance of risks
going forward was weighted mainly in the direction
of rising inflation pressures. In particular, it was
becoming increasingly clear that the Committee
would need to move more aggressively at a later
meeting if imbalances continued to build and inflation and inflation expectations, which had remained
relatively subdued until then, began to pick up.1
Some readings between the March and May meetings of the FOMC on labor costs and prices suggested a possible increase of inflation pressures.
Moreover, aggregate demand had continued to grow
at a fast clip, and markets for labor and other
resources were showing signs of further tightening.
Financial market conditions had firmed in response to
these developments; the substantial rise in private
borrowing rates between March and May had been
influenced by the buildup in expectations of more
policy tightening as market participants recognized
the need for higher short-term interest rates. Given all
these circumstances, the FOMC decided in May to
raise the target for the overnight federal funds rate
50 basis points, to 6V2 percent. The Committee saw
little risk in the more forceful action given the strong
momentum of the economic expansion and wide-
spread market expectations of such an action. Even
after taking into account its latest action, however,
the FOMC saw the strength in spending and pressures in labor markets as indicating that the balance
of risks remained tilted toward rising inflation.
By the June FOMC meeting, the incoming data
were suggesting that the expansion of aggregate demand might be moderating toward a more sustainable
pace: Consumers had increased their outlays for
goods modestly during the spring; home purchases
and starts appeared to have softened; and readings on
the labor market suggested that the pace of hiring
might be cooling off. Moreover, much of the effects
on demand of previous policy firmings, including the
50 basis point tightening in May, had not yet been
fully realized. Financial market participants interpreted signs of economic slowing as suggesting that
the Federal Reserve probably would be able to hold
inflation in check without much additional policy
firming. However, whether aggregate demand had
moved decisively onto a more moderate expansion
track was not yet clear, and labor resource utilization
remained unusually elevated. Thus, although the
FOMC decided to defer any policy action in June, it
indicated that the balance of risks was still on the side
of rising inflation in the foreseeable future.2
1. At its March and May meetings, the FOMC took a number of
actions that were aimed at adjusting the implementation of monetary
policy to actual and prospective reductions in the stock of Treasury
debt securities. These actions are described in the discussion of U.S.
financial markets.
2. At its June meeting, the FOMC did not establish ranges for
growth of money and debt in 2000 and 2001. The legal requirement to
establish and to announce such ranges had expired, and owing to
uncertainties about the behavior of the velocities of debt and money,
these ranges for many years have not provided useful benchmarks for
the conduct of monetary policy. Nevertheless, the FOMC believes that
the behavior of money and credit will continue to have value for
gauging economic and financial conditions, and this report discusses
recent developments in money and credit in some detail.
Monetary Policy Report to the Congress
Economic Projections for 2000 and 2001
The members of the Board of Governors and the
Federal Reserve Bank presidents expect the current
economic expansion to continue through next year,
but at a more moderate pace than the average over
recent quarters. For 2000 as a whole, the central
tendency of their forecasts for the rate of increase
in real gross domestic product (GDP) is 4 percent to
4'/2 percent, measured as the change between the
fourth quarter of 1999 and the fourth quarter of 2000.
Over the four quarters of 2001, the central tendency
forecasts of real GDP are in the VA percent to
33A percent range. With this pace of expansion, the
civilian unemployment rate should remain near its
recent level of 4 percent. Even with the moderation in
the pace of economic activity, the Committee members and nonvoting Bank presidents expect that inflation may be higher in 2001 than in 1999, and the
Committee will need to be alert to the possibility that
financial conditions may need to be adjusted further
to balance aggregate demand and potential supply
and to keep inflation low.
Considerable uncertainties attend estimates of
potential supply—both the rate of growth and the
level of the economy's ability to produce on a sustained non-inflationary basis. Business investment in
new equipment and software has been exceptionally
1.
Economic projections for 2000 and 2001
Percent
Federal Reserve governors
and Reserve Bank presidents
Administration
Indicator
Ranap
Ran§e
Central
tendency
2000
Change, fourth quarter
to fourth quarter!
Nominal GDP
Real GDP 2
PCE prices
6 - 7 Vi
3%-5
2-2%
6</4-6%
4-4!/2
2'/2-2%
6.0
3.9
3.2 3
Average level,
fourth quarter
Civilian unemployment
rate
4-414
About 4
4.1
2001
Change, fourth quarter
to fourth quarter1
Nominal GDP
Real GDP 2
PCE prices
5 - 6 Vi
2'/2-4
l%-3
5'/2-6
31/4-3%
2-2'/a
Average level,
fourth quarter
Civilian unemployment
rate
4.41/2
4-4'/4
5.3
3.2
2.5 3
4.2
1. Change from average for fourth quarter of previous year to average for
fourth quarter of year indicated.
2. Chain-weighted.
3. Projection for the consumer price index.
541
high, and given the rapid pace of technological
change, firms will continue to exploit opportunities to
implement more-efficient processes and to speed the
flow of information across markets. In such an environment, a further pickup in productivity growth is a
distinct possibility. However, a portion of the very
rapid rise in measured productivity in recent quarters
may be a result of the cyclical characteristics of this
expansion rather than an indication of structural rates
of increase consistent with holding the level of
resource utilization unchanged. Current levels of
labor resource utilization are already unusually high.
To date, this has not led to escalating unit labor costs,
but whether such a favorable performance in the
labor market can be sustained is one of the important
uncertainties in the outlook.
On the demand side, the adjustments in financial
markets that have accompanied expected and actual
tighter monetary conditions may be beginning to
moderate the rise in domestic demand. As that process evolves, the substantial impetus that household
spending has received in recent years from rapid
gains in equity wealth should subside. The higher
cost of business borrowing and more-restrictive credit
supply conditions probably will not exert substantial
restraint on investment decisions, particularly as long
as the costs and potential productivity payoffs of new
equipment and software remain attractive. The slowing in domestic spending will not be fully reflected in
a more moderate expansion of domestic production.
Some of the slowing will be absorbed in smaller
increases in imports of goods and services, and given
continued recovery in economic activity abroad,
domestic firms are expected to continue seeing a
boost to demand and to production from rising
exports.
Regarding inflation, FOMC participants believe
that the rise in consumer prices will be noticeably
larger this year than in 1999 and that inflation will
then drop back somewhat in 2001. The central tendency of their forecasts for the increase in the chaintype index for personal consumption expenditures
is 2V2 percent to 23A percent over the four quarters
of 2000 and 2 percent to 2xh percent during 2001.
Shaping the contour of this inflation forecast is the
expectation that the direct and indirect effects of the
boost to domestic inflation this year from the rise in
the price of world crude oil will be partly reversed
next year if, as futures markets suggest, crude oil
prices retrace this year's run-up by next year. Nonetheless, these forecasts show consumer price inflation
in 2001 to have moved above the rates that prevailed
over the 1997-98 period. Such a trend, were it not to
show signs of quickly stabilizing or reversing, would
542
Federal Reserve Bulletin • August 2000
pose a considerable risk to the continuation of the
extraordinary economic performance of recent years.
The economic forecasts of the FOMC are similar
to those recently released by the Administration in its
Mid-Session Review of the Budget. Compared with
the forecasts available in February, the Administration raised its projections for the increase in real GDP
in 2000 and 2001 to rates that lie at the low end of the
current range of central tendencies of Federal Reserve
policymakers. The Administration also expects that
the unemployment rate will remain close to 4 percent. Like the FOMC, the Administration sees consumer price inflation rising this year and falling back
in 2001. After accounting for the differences in the
construction of the alternative measures of consumer
prices, the Administration's projections of increases
in the consumer price index (CPI) of 3.2 percent in
2000 and 2.5 percent in 2001 are broadly consistent
with the Committee's expectations for the chain-type
price index for personal consumption expenditures.
ECONOMIC
IN 2000
AND FINANCIAL
DEVELOPMENTS
The expansion of U.S. economic activity maintained
considerable momentum through the early months of
2000 despite the firming in credit markets that has
occurred over the past year. Only recently has the
pace of real activity shown signs of having moderated from the extremely rapid rate of increase that
prevailed during the second half of 1999 and the
first quarter of 2000. Real GDP increased at an annual
rate of 5Vi percent in the first quarter of 2000. Private
domestic final sales, which had accelerated in the
Change in real GDP
Percent, annual rate
Ql
1994
I
III I
1995
1996
1997
1998
1999
2000
NOTE. In this chart and in subsequent charts that show the components of
real GDP, changes are measured to the final quarter of the period indicated, from
the final quarter of the previous period.
Change in PCE chain-type price index
Percent, annual rate
Ql
llli.ll
J
1994
1995
L
1996
1997
1998
1999
2000
second half of 1999, were particularly robust, rising
at an annual rate of almost 10 percent in the first
quarter. Underlying that surge in domestic spending
were many of the same factors that had contributed
to the considerable strength of outlays in the second
half of 1999. The ongoing influence of substantial
increases in real income and wealth continued to fuel
consumer spending, and business investment, which
continues to be undergirded by the desire to take
advantage of new, cost-saving technologies, was further buoyed by an acceleration in sales and profits
late last year. Export demand posted a solid gain
during the first quarter while imports rose even more
rapidly to meet booming domestic demand. The
available data, on balance, point to another solid
increase in real GDP in the second quarter, although
they suggest that private household and business
fixed investment spending likely slowed noticeably
from the extraordinary first-quarter pace. Through
June, the expansion remained brisk enough to keep
labor utilization near the very high levels reached at
the end of 1999 and to raise the factory utilization
rate to close to its long-run average by early spring.
Inflation rates over the first half of 2000 were
elevated by an additional increase in the price of
imported crude oil, which led to sharp hikes in retail
energy prices early in the year and again around
midyear. Apart from energy, consumer price inflation so far this year has been somewhat higher than
during 1999, and some of that acceleration may be
attributable to the indirect effects of higher energy
costs on the prices of core goods and services.
Sustained strong gains in worker productivity
have kept increases in unit labor costs minimal
despite the persistence of a historically low rate of
unemployment.
Monetary Policy Report to the Congress
C h a n g e in real i n c o m e and c o n s u m p t i o n
Percent, annual rate
Q
Disposable personal income
1994
1995
The Household
1996
1997
1998
1999
2000
Sector
Consumer Spending
Consumer spending was exceptionally vigorous during the first quarter of 2000. Real personal consumption expenditures rose at an annual rate of 13A percent, the sharpest increase since early 1983. At that
time, the economy was rebounding from a deep
recession during which households had deferred
discretionary purchases. In contrast, the first-quarter
surge in consumption came on the heels of two years
of very robust spending during which real outlays
increased at an annual rate of more than 5 percent,
and the personal saving rate dropped sharply.
Outlays for durable goods, which rose at a very
fast pace in 1998 and 1999, accelerated during the
first quarter to an annual rate of more than 24 percent.
Most notably, spending on motor vehicles, which had
climbed to a new high in 1999, jumped even further
in the first quarter of 2000 as unit sales of light motor
vehicles soared to a record rate of 18.1 million units.
In addition, households' spending on computing
equipment and software rebounded after the turn of
the year; some consumers apparently had postponed
their purchases of these goods in late 1999 before the
century date change. Outlays for nondurable goods
posted a solid increase of 53A percent in the first
quarter, marked by a sharp upturn in spending on
clothing and shoes. Spending for consumer services
also picked up in the first quarter, rising at an annual
rate of 5V2 percent. Spending was quite brisk for a
number of non-energy consumer services, ranging
from recreation and telephone use to brokerage fees.
Also contributing to the acceleration was a rebound
in outlays for energy services, which had declined in
late 1999, when weather was unseasonably warm.
543
In recent months, the rise in consumer spending
has moderated considerably from the phenomenal
pace of the first quarter, with much of the slowdown
in outlays for goods. At an annual rate of 17LA million units in the second quarter, light motor vehicles
sold at a rate well below their first-quarter pace.
Nonetheless, that level of sales is still historically
high, and with prices remaining damped and automakers continuing to use incentives, consumers'
assessments of the motor vehicle market continue to
be positive. The information on retail sales for the
April-to-June period indicate that consumer expenditures for other goods rose markedly slower in the
second quarter than in the first quarter, at a pace well
below the average rate of increase during the preceding two years. In contrast, personal consumption
expenditures for consumer services continued to rise
relatively briskly in April and May.
Real disposable personal income increased at an
annual rate of about 3 percent between December
and May—slightly below the 1999 pace of 33/4 percent. However, the impetus to spending from the
rapid rise in household net worth was still considerable, labor markets remained tight, and confidence
was still high. As a result, households continued to
allow their spending to outpace their flow of current
income, and the personal saving rate, as measured in
the national income and product accounts, dropped
further, averaging less than 1 percent during the first
five months of the year.
After having boosted the ratio of household net
worth to disposable income to a record high in the
first quarter, stock prices have fallen back, suggesting
less impetus to consumer spending going forward. In
addition, smaller employment gains and the pickup in
W e a l t h and s a v i n g
Ratio
1978
Percent
1982
1986
1990
1994
1998
NOTE. The wealth-to-income ratio is the ratio of net worth of households to
disposable personal income.
544
Federal Reserve Bulletin • August 2000
energy prices have moderated the rise in real income
of late. Although these developments left some
imprint on consumer attitudes in June, households
remained relatively upbeat about their prospective
financial situation, according to the results of the
University of Michigan Survey Research Center
(SRC) survey. However, they became a bit less positive about the outlook for business conditions and
saw a somewhat greater likelihood of a rise in unemployment over the coming year.
Residential Investment
Housing activity stayed at a high level during the first
half of this year. Homebuilders began the year with a
considerable backlog of projects that had developed
as the exceptionally strong demand of the previous
year strained capacity. As a result, they maintained
starts of new single-family homes at an annual rate of
1.33 million units, on average, through April—
matching 1999's robust pace. Households' demand
for single-family homes was supported early in the
year by ongoing gains in jobs and income and the
earlier run-up in wealth; those forces apparently were
sufficient to offset the effects that higher mortgage
interest rates had on the affordability of new homes.
Sales of new homes were particularly robust, setting
a new record by March; but sales of existing units
slipped below their 1999 high. As a result of the
continued strength in sales, the homeownership rate
reached a new high in the first quarter.
By the spring, higher mortgage interest rates were
leaving a clearer mark on the attitudes of both consumers and builders. The Michigan SRC survey
reported that households' assessments of homebuying conditions dropped between April and June to the
Private housing starts
Millions of units, annual rate
Ql
Single-family
/
/ W
Multifamily
1
1
1990
1
1
1992
1
1
1994
1
1
1996
1
1
1998
1.2
—
.8
Q1
/
1
1
1988
—
—
1
1
2000
4
lowest level in more than nine years. Survey respondents noted that, besides higher financing costs,
higher prices of homes were becoming a factor in
their less positive assessment of market conditions.
Purchases of existing homes were little changed,
on balance, in April and May from the first-quarter
average; however, because these sales are recorded at
the time of closing, they tend to be a lagging indicator of demand. Sales of new homes—a more current
indicator—fell back in April and May, and homebuilders reported that sales dropped further in June.
Perhaps a sign that softer demand has begun to affect
construction, starts of new single-family homes
slipped to a rate of llA million units in May. That
level of new homebuilding, although noticeably
slower than the robust pace that characterized the fall
and winter period, is only a bit below the elevated
level that prevailed throughout much of 1998, when
single-family starts reached their highest level in
twenty years. Starts of multifamily housing units,
which also had stepped up sharply in the first quarter
of the year, to an annual rate of 390,000 units, settled
back to a 340,000 unit rate in April and May.
Household Finance
Fueled by robust spending, especially early in the
year, the expansion of household debt remained brisk
during the first half of 2000, although below the very
strong 1999 growth rate. Apparently, a favorable
outlook for income and employment, along with rising wealth, made households feel confident enough
to continue to spend and take on debt. Despite rising
mortgage and consumer loan rates, household debt
increased at an annual rate of nearly 8 percent in the
first quarter, and preliminary data point to a similar
increase in the second quarter.
Mortgage debt expanded at an annual rate of 7 percent in the first quarter, boosted by the high level
of housing activity. Household debt not secured by
real estate—including credit card balances and auto
loans—posted an impressive 10 percent gain in the
first quarter to help finance a large expansion in
outlays for consumer durables, especially motor vehicles. The moderation in the growth of household debt
this year has been driven primarily by its mortgage
component: Preliminary data for the second quarter
suggest that, although consumer credit likely decelerated from the first quarter, it still grew faster than in
1999.
Debt in margin accounts, which is largely a household liability and is not included in reported measures
of credit market debt, has declined, on net, in recent
Monetary Policy Report to the Congress
Delinquency rates on household loans
545
Change in real business fixed investment
Percent
Percent, annual rate
] Structures
Ql
I Equipment and software
Credit card accounts
at banks
—
5
Q1
—
4
—
3
- x Ql
—
2
N
—
20
^
Auto loans at domestic
auto finance companies
j
uiuJjij
10
Mortgages
1
1
1988
1
1
1990
1
!
1992
i
i
1994
i
i
1996
1
T""~> Q M
1998
2000
1994
1995
1996
1997
1998
1999
2000
NOTE. Data on credit card delinquencies are from bank Call Reports; data on
auto loan delinquencies are from the Big Three automakers; data on mortgage
delinquencies are from the Mortgage Bankers Association.
months, following a surge from late in the third
quarter of 1999 through the end of March 2000.
There has been no evidence that recent downdrafts in
share prices this year caused serious repayment problems at the aggregate level that might pose broader
systemic concerns.
The combination of rapid debt growth and rising
interest rates has pushed the household debt-service
burden to levels not reached since the late 1980s.
Nonetheless, with household income and net worth
both having grown rapidly, and employment prospects favorable, very few signs of worsening credit
problems in the household sector have emerged, and
commercial banks have reported in recent Federal
Reserve surveys that they remain favorably disposed
to make consumer installment and mortgage loans.
Indeed, financial indicators of the household sector
have remained mostly positive: The rate of personal
bankruptcy filings fell in the first quarter to its lowest
level since 1996; delinquency rates on home mortgages and auto loans remained low; and the delinquency rate on credit cards edged down further,
although it remained in the higher range that has
prevailed since the mid-1990s. However, delinquency
rates may be held down, to some extent, by the surge
in new loan originations in recent quarters because
newly originated loans are less likely to be delinquent
than seasoned ones.
The Business Sector
Fixed Investment
The boom in capital spending extended into the first
half of 2000 with few indications that businesses'
desire to take advantage of more-efficient technologies is diminishing. Real business fixed investment
surged at an annual rate of almost 24 percent in the
first quarter of the year, rebounding sharply from its
lull at the end of 1999, when firms apparently postponed some projects because of the century date
change. In recent months, the trends in new orders
and shipments of nondefense capital goods suggest
that demand has remained solid.
Sustained high rates of investment spending have
been a key feature shaping the current economic
expansion. Business spending on new equipment and
software has been propelled importantly by ongoing
advances in computer and information technologies
that can be applied to a widening range of business
processes. The ability of firms to take advantage of
these emerging developments has been supported by
the strength of domestic demand and by generally
favorable conditions in credit and equity markets. In
addition, because these high-technology goods can be
produced increasingly efficiently, their prices have
continued to decline steeply, providing additional
incentive for rapid investment. The result has been a
significant rise in the stock of capital in use by
businesses and an acceleration in the flow of services
from that capital as more-advanced vintages of equipment replace older ones. The payoff from the prolonged period during which firms have upgraded
their plant and equipment has increasingly shown
through in the economy's improved productivity
performance.
Real outlays for business equipment and software
shot up at an annual rate of nearly 25 percent in the
first quarter of this year. That jump followed a modest increase in the final quarter of 1999 and put
spending for business equipment and software back
on the double-digit uptrend that has prevailed
546
Federal Reserve Bulletin • August 2000
throughout the current economic recovery. Concerns
about potential problems with the century date
change had the most noticeable effect on the patterns
of spending for computers and peripherals and for
communications equipment in the fourth and first
quarters; expenditures for software were also
affected, although less so. For these categories of
goods overall, the impressive resurgence in business
purchases early this year left little doubt that the
underlying strength in demand for high-tech capital
goods had been only temporarily interrupted by the
century date change. Indeed, nominal shipments of
office and computing equipment and of communication devices registered sizable increases over the
April-May period.
In the first quarter, business spending on computers
and peripheral equipment was up almost 40 percent
from a year earlier—a pace in line with the trend of
the current expansion. Outlays for communications
equipment, however, accelerated; the first-quarter
surge brought the year-over-year increase in spending to 35 percent, twice the pace that prevailed a year
earlier. Expanding Internet usage has been driving
the need for new network architectures. In addition,
cable companies have been investing heavily in
preparation for their planned entry into the markets
for residential and commercial telephony and broadband Internet services.
Demand for business equipment outside of the
high-tech area was also strong at the beginning of the
year. In the first quarter, outlays for industrial equipment rose at a brisk pace for a third consecutive
quarter as the recovery of the manufacturing sector
from the effects of the Asian crisis gained momentum. In addition, investment in farm and construction
machinery, which had fallen steadily during most of
1999, turned up, and shipments of civilian aircraft to
domestic customers increased. More recent data show
a further rise in the backlog of unfilled orders placed
with domestic firms for equipment and machinery
(other than high-tech items and transportation equipment), suggesting that demand for these items has
been well maintained. However, business purchases
of motor vehicles are likely to drop back in the
second quarter from the very high level recorded at
the beginning of the year. In particular, demand for
heavy trucks appears to have been adversely affected
by higher costs of fuel and shortages of drivers.
Real investment in private nonresidential structures jumped at an annual rate of more than 20 percent in the first quarter of the year after having
declined in 1999. Both last year's weakness and this
year's sudden and widespread revival are difficult to
explain fully. Nonetheless, the higher levels of spend
ing on office buildings, other commercial facilities,
and industrial buildings recorded early this year
would seem to accord well with the overall strength
in aggregate demand. However, the fundamentals in
this sector of the economy are mixed. Available information suggests that property values for offices, retail
space, and warehouses have been rising more slowly
than they were several years ago. However, office
vacancy rates have come down, which suggests that,
at least at an aggregate level, the office sector is not
overbuilt. The vacancy rate for industrial buildings
has also fallen, but in only a few industries, such as
semiconductors and other electronic components, are
capacity pressures sufficiently intense to induce significant expansion of production facilities.
Inventory Investment
The ratio of inventories to sales in many nonfarm
industries moved lower early this year. Those firms
that had accumulated some additional stocks toward
the end of 1999 as a precaution against disruptions
related to the century date change seemed to have
little difficulty working off those inventories after
the smooth transition to the new year. Moreover, the
first-quarter surge in final demand may have, to some
extent, exceeded businesses' expectations. In currentcost terms, non-auto manufacturing and trade establishments built inventories in April and May at a
somewhat faster rate than in the first quarter but still
roughly in line with the rise in their sales. As a result,
the ratio of inventories to sales, at current cost, for
these businesses was roughly unchanged from the
first quarter. Overall, the ongoing downtrend in the
ratios of inventories to sales during the past several
years suggests that businesses increasingly are taking
Change in real nonfarm business inventories
Percent, annual rate
Ql
I.I
1994
1995
1996
1997
1998
1999
2000
Monetary Policy Report to the Congress
advantage of new technologies and software to implement better inventory management.
The swing in inventory investment in the motor
vehicle industry has been more pronounced recently.
Dealer stocks of new cars and light trucks were
drawn down during the first quarter as sales climbed
to record levels. Accordingly, auto and truck makers
kept assemblies at a high level through June in order
to maintain ready supplies of popular models. Even
though demand appears to have softened and inventories of a few models have backed up, scheduled
assemblies for the third quarter are above the elevated
level of the first half.
547
Before-tax profits of nonfinancial corporations
as a share of GDP
Percent
14
1977
Business Finance
1980
1983
1986
1989
1992
1995
1998 2000
NOTE. Profits from domestic operations, with inventory valuation and capital
consumption adjustments, divided by gross domestic product of nonfinancial
corporate sector.
The economic profits of nonfinancial U.S. corporations posted another solid increase in the first quarter.
The profits that nonfinancial corporations earned on
their domestic operations were 10 percent above the
level of a year earlier; the rise lifted the share of
profits in this sector's nominal output close to its
1997 peak. Nonetheless, with investment expanding
rapidly, businesses' external financing requirements,
measured as the difference between capital expenditures and internally generated funds, stayed at a high
level in the first half of this year. Businesses' credit
demands were also supported by cash-financed
merger and acquisition activity. Total debt of nonfinancial businesses increased at a IOV2 percent clip
in the first quarter, close to the brisk pace of 1999,
and available information suggests that borrowing
remained strong into the second quarter.
On balance, businesses have altered the composition of their funding this year to rely more on shorter-
term sources of credit and less on the bond market,
although the funding mix has fluctuated widely
in response to changing market conditions. After the
passing of year-end, corporate borrowers returned to
the bond market in volume in February and March,
but subsequent volatility in the capital market in
April and May prompted a pullback. In addition,
corporate bond investors have been less receptive to
smaller, less liquid offerings, as has been true for
some time.
In the investment-grade market, bond issuers have
responded to investors' concerns about the interest
rate and credit outlook by shortening the maturities of
their offerings and by issuing more floating-rate securities. In the below-investment-grade market, many
of the borrowers who did tap the bond market in
Gross corporate bond issuance
Billions of dollars
•
High yield
Bi Investment grade
J
J
A
S
O
N
D
J
F
1998
NOTE. Excludes unrated issues and issues sold abroad.
M
A
M
J
J
1999
A
S
O
N
D
J
F
M
2000
A
M
J
548
Federal Reserve Bulletin • August 2000
Spreads of corporate bond yields
over the ten-year swap rate
Default rates on outstanding junk bonds
Percentage points
High yield
J J A S O N D J
1998
FMAMJ J A S O N D J
1999
FMAMJ
2000
J
1. Year to date.
SOURCE. Moody's Investors Service.
NOTE. The data are daily. The spreads compare the yields on the Merrill
Lynch AA, BBB, and 175 indexes with the ten-year swap rate from Bloomberg.
Last observations are for July 17, 2000.
February and March did so by issuing convertible
bonds and other equity-related debt instruments. Subsequently, amid increased equity market volatility
and growing investor uncertainty about the outlook
for prospective borrowers, credit spreads in the corporate bond market widened, and issuance in the
below-investment-grade market dropped sharply in
April and May. Conditions in the corporate bond
market calmed in late May and June, and issuance
recovered to close to its first-quarter pace.
As the bond market became less hospitable in the
spring, many businesses evidently turned to banks
and to the commercial paper market for financing.
Partly as a result, commercial and industrial loans at
Ratio of liabilities of failed nonfinancial firms
to liabilities of all nonfinancial firms
Percent, annual rate
1.2
banks have expanded briskly, even as a larger percentage of banks have reported in Federal Reserve
surveys that they have been tightening standards and
terms on such loans.
Underscoring lenders' concerns about the creditworthiness of borrowers, the ratio of liabilities of
failed businesses to total liabilities has increased further so far this year, and the default rate on outstanding junk bonds has risen further from the relatively
elevated level reached in 1999. Through midyear,
Moody's Investors Service has downgraded, on net,
more debt in the nonfinancial business sector than it
has upgraded, although it has placed more debt on
watch for future upgrades than downgrades.
Commercial mortgage borrowing has also
expanded at a robust pace over the first half of 2000,
as investment in office and other commercial building
strengthened. Extending last year's trend, borrowers
have tapped banks and life insurance companies as
the financing sources of choice. Banks, in particular,
have reported stronger demand for commercial real
estate loans this year even as they have tightened
standards a bit for approving such loans. In the market for commercial mortgage-backed securities,
yields have edged higher since the beginning of the
year.
The Government
Sector
Federal Government
1989
1991
1993
1. Year to date.
SOURCE. D u n & B r a d s t r e e t .
1995
1997
1999
The incoming information regarding the federal budget suggests that the surplus in the current fiscal year
will surpass last year's by a considerable amount.
Over the first eight months of fiscal year 2000—the
Monetary Policy Report to the Congress
National saving as a share of nominal GNP
Percent
Excluding federal saving
—
Q1
V
N —
—
Total
1 1 i
1982
20
1
1 1 I
1986
1
1 1
1990
1
1
16
Ql
! 1
1994
1 1
1 1
1998
1 1
NOTE. National saving comprises the gross saving of households, businesses,
and governments.
period from October to May—the unified budget
recorded a surplus of about $120 billion, compared
with $41 billion during the comparable period of
fiscal 1999. The Office of Management and Budget
and the Congressional Budget Office are now forecasting that, when the fiscal year closes, the unified
surplus will be around $225 billion to $230 billion,
$100 billion higher than in the preceding year. That
outcome would likely place the surplus at more than
21/4 percent of GDP, which would exceed the most
recent high of 1.9 percent, which occurred in 1951.
The swing in the federal budget from deficit to
surplus has been an important factor in maintaining
national saving. The rise in federal saving as a percentage of gross national product from -3.5 percent
in 1992 to 3.1 percent in the first quarter of this year
has been sufficient to offset the drop in personal
Federal receipts and expenditures as a share of nominal GDP
Percent
—
—
24
—
22
Total expenditures
—
2
0
Total receipts
—
1 1 1
1982
1
I I
1986
1
1
1 1
1990
1
1
1 1
1994
1 1
1 1
1998
I
18
1
NOTE. Data on receipts and expenditures are from the unified budget. Values
for 2000 are current services estimates from the Mid-Session Review of the
Budget by the Office of Management and Budget.
549
saving that occurred over the same period. As a
result, gross saving by households, businesses, and
governments has stayed above 18 percent of GNP
since 1997, compared with I6V2 percent over the
preceding seven years. The deeper pool of national
saving, along with the continued willingness of foreign investors to finance our current account deficit,
remains an important factor in containing increases in
the cost of capital and sustaining the rapid expansion
of domestic investment. With longer-run projections
showing a rising federal government surplus over the
next decade, this source of national saving could
continue to expand.
The recent good news on the federal budget has
been primarily on the receipts side of the ledger.
Nonwithheld tax receipts were very robust this
spring. Both final payments on personal income tax
liabilities for 1999 and final corporate tax payments
for 1999 were up substantially. So far this year, the
withheld tax and social insurance contributions on
this year's earnings of individuals have also been
strong. As a result, federal receipts during the first
eight months of the fiscal year were almost 12 percent higher than they were during the year-earlier
period.
While receipts have accelerated, federal expenditures have been rising only a little faster than during
fiscal 1999 and continue to decline as a share of
nominal GDP. Nominal outlays for the first eight
months of the current fiscal year were 5XA percent
above the year-earlier period. Increases in discretionary spending have picked up a bit so far this year. In
particular, defense spending has been running higher
in the wake of the increase in budget authority
enacted last year. The Congress has also boosted
agricultural subsidies in response to the weakness in
farm income. While nondiscretionary spending continues to be held down by declines in net interest
payments, categories such as Medicaid and other
health programs have been rising more rapidly of
late.
As measured by the national income and product
accounts, real federal expenditures for consumption
and gross investment dropped sharply early this year
after having surged in the fourth quarter of 1999.
These wide quarter-to-quarter swings in federal
spending appear to have occurred because the Department of Defense speeded up its payments to vendors
before the century date change; actual deliveries of
defense goods and services were likely smoother. On
average, real defense spending in the fourth and first
quarters was up moderately from the average level in
fiscal 1999. Real nondefense outlays continued to
rise slowly.
550
Federal Reserve Bulletin • August 2000
Federal government debt held by the public
Percent of nominal GDP
—
__
—
N.
i
—
—
60
—
50
V
40
—
30
1 1 1 1 1 1I 11 1 1 1 1 i111 11 1 1 1 1 11 I 11 11 1 1 I I 1 1 1 1 1 1 1 1 1
1999
1959
1969
1979
1989
NOTE. The data are annual and extend through 2000. Federal debt held by
private investors is gross federal debt less debt held by federal government
accounts and the Federal Reserve System. The value for 2000 is an estimate
based on the Administration's June 26 Mid-Session Review of the Budget.
With current budget surpluses coming in above
expectations and large surpluses projected to continue for the foreseeable future, the federal government has taken additional steps aimed at preserving a
high level of liquidity in the market for its securities.
Expanding on efforts to concentrate its declining debt
issuance in fewer highly liquid securities, the Treasury announced in February its intention to issue only
two new five- and ten-year notes and only one new
thirty-year bond each year. The auctions of five- and
ten-year notes will remain quarterly, alternating
between new issues and smaller reopenings, and the
bond auctions will be semiannual, also alternating
between new and smaller reopened offerings. The
Treasury also announced that it was reducing the
frequency of its one-year bill auctions from monthly
to quarterly and cutting the size of the monthly
two-year note auctions. In addition, the Treasury
eliminated the April auction of the thirty-year
inflation-indexed bond and indicated that the size of
the ten-year inflation-indexed note offerings would
be modestly reduced. Meanwhile, anticipation of
even larger surpluses in the wake of the surprising
strength of incoming tax receipts so far in 2000 led
the Treasury to announce, in May, that it was again
cutting the size of the monthly two-year note auctions. The Treasury also noted that it is considering
additional changes in its auction schedule, including
the possible elimination of the one-year bill auctions
and a reduction in the frequency of its two-year note
auctions.
Early in the year, the Treasury unveiled the details
of its previously announced reverse-auction, or debt
buyback, program, whereby it intends to retire sea
soned, less liquid, debt securities with surplus cash,
enabling it to issue more "on-the-run" securities.
The Treasury noted that it would buy back as much
as $30 billion this year. The first operation took place
in March, and in May the Treasury announced a
schedule of two operations per month through
the end of July of this year. Through midyear, the
Treasury has conducted eight buyback operations,
redeeming a total of $15 billion. Because an important goal of the buyback program is to help forestall
further increases in the average maturity of the Treasury's publicly held debt, the entire amount redeemed
so far has corresponded to securities with remaining
maturities at the long end of the yield curve (at least
fifteen years).
State and Local Governments
In the state and local sector, real consumption and
investment expenditures registered another strong
quarter at the beginning of this year. In part, the
unseasonably good weather appears to have accommodated more construction spending than usually
occurs over the winter. However, some of the recent
rise is an extension of the step-up in spending that
emerged last year, when real outlays rose 5 percent
after having averaged around 3 percent for the preceding three years. Higher federal grants for highway
construction have contributed to the pickup in spending. In addition, many of these jurisdictions have
experienced solid improvements in their fiscal conditions, which may be allowing them to undertake new
spending initiatives.
The improving fiscal outlook for state and local
governments has affected both the issuance and the
quality of state and local debt. Borrowing by states
and municipalities expanded sluggishly in the first
half of this year. In addition to the favorable budgetary picture, rising interest rates have reduced the
demand for new capital financing and substantially
limited refunding issuance. Credit upgrades have outnumbered downgrades by a substantial margin in the
state and local sector.
The External Sector
Trade and Current Account
The deficits in U.S. external balances have continued
to get even larger this year. The current account
deficit reached an annual rate of $409 billion in the
first quarter of 2000, or 4LA percent of GDP, com-
Monetary Policy Report to the Congress
U.S. current account
Billions of dollars, annual rate
70
140
—
210
280
—
350
Ql
1994
1995
1996
1997
1998
1999
2000
pared with $372 billion and 4 percent in the second
half of 1999. Net payments of investment income
were a bit less in the first quarter than in the second
half of last year owing to a sizable increase in income
receipts from direct investment abroad. Most of the
expansion in the current account deficit occurred in
trade in goods and services. In the first quarter, the
deficit in trade in goods and services widened to an
annual rate of $345 billion, a considerable expansion
from the deficit of $298 billion recorded in the second half of 1999. Trade data for April suggest that
the deficit may have increased further in the second
quarter.
U.S. exports of real goods and services rose at an
annual rate of 6VA percent in the first quarter, following a strong increase in exports in the second half of
last year. The pickup in economic activity abroad that
began in 1999 continued to support export demand
and partly offset negative effects on price competitiveness of U.S. products from the dollar's past appre-
551
ciation. By market destination, U.S. exports to Canada, Mexico, and Europe increased the most. By
product group, export expansion was concentrated in
capital equipment, industrial supplies, and consumer
goods. Preliminary data for April suggest that growth
of real exports remained strong.
The quantity of imported goods and services continued to expand rapidly in the first quarter. The
increase in imports, at an annual rate of 113A percent,
was the same in the first quarter as in the second half
of 1999 and reflected both the continuing strength of
U.S. domestic demand and the effects of past dollar
appreciation on price competitiveness. Imports of
consumer goods, automotive products, semiconductors, telecommunications equipment, and other
machinery were particularly robust. Data for April
suggest that the second quarter got off to a strong
start. The price of non-oil goods imports rose at an
annual rate of 13A percent in the first quarter, the
second consecutive quarter of sizable price increases
following four years of price declines; non-oil import
prices in the second quarter posted only moderate
increases.
A number of developments affecting world oil
demand and supply led to a further step-up in the spot
price of West Texas intermediate (WTI) crude this
year, along with considerable volatility. In the wake
of the plunge of world oil prices during 1998, the
Organization of Petroleum Exporting Countries
(OPEC) agreed in early 1999 to production restraints
that, by late in the year, restored prices to their 1997
level of about $20 per barrel. Subsequently, continued recovery of world demand, combined with some
Prices for oil and other commodities
Index, January 1999 = 100
Dollars per barrel
Oil
Change in real imports and exports of goods and services
,—v
Percent, annual rate
Q
H
Imports
Exports
150 —
—
30
—
20
—
10
^
20
15
Non-oil commodities
10
1
i
Ql
i
Q2
1999
1994
1995
1996
1997
1998
1999
2000
t
i
Q3
Q4
,
Ql
,
Q2
2000
1
Q3
NOTE. The oil price is the spot price of West Texas intermediate crude oil.
The price for non-oil commodities is a weighted average of thirty-nine non-fuel
primary-commodity prices from the International Monetary Fund. The data are
monthly. The last observation for non-oil commodities is May; for oil, July
average through July 12, 2000.
552
Federal Reserve Bulletin • August 2000
supply disruptions, caused the WTI spot price to
spike above $34 per barrel during March of this year,
the highest level since the Gulf War more than nine
years earlier. Oil prices dropped back temporarily in
April, but in May and June the price of crude oil
moved back up again, as demand was boosted further
by strong global economic activity and by rebuilding
of oil stocks. In late June, despite an announcement
by OPEC that it would boost production, the WTI
spot price reached a new high of almost $35 per
barrel, but by early July the price had settled back to
about $30 per barrel.
investment was associated with cross-border merger
activity.
Capital inflows from foreign official sources in the
first quarter of this year were sizable—$20 billion,
compared with $43 billion for all of 1999. As was the
case last year, the increase in foreign official reserves
in the United States in the first quarter was concentrated in a relatively few countries. Partial data for
the second quarter of 2000 show a small official
outflow.
The Labor Market
Financial Account
Employment and Labor Supply
Capital flows in the first quarter of 2000 continued to
reflect the relatively strong performance of the U.S.
economy and transactions associated with global
corporate mergers. Foreign private purchases of U.S.
securities remained brisk—well above the record
pace set last year. In addition, the mix of U.S. securities purchased by foreigners in the first quarter
showed a continuation of last year's trend toward
smaller holdings of U.S. Treasury securities and
larger holdings of U.S. agency and corporate securities. Private-sector foreigners sold more than $9 billion in Treasury securities in the first quarter while
purchasing more than $26 billion in agency bonds.
Despite a mixed performance of U.S. stock prices,
foreign portfolio purchases of U.S. equities exceeded
$60 billion in the first quarter, more than half of the
record annual total set last year. U.S. purchases of
foreign securities remained strong in the first quarter
of 2000.
Foreign direct investment flows into the United
States were robust in the first quarter of this year as
well. As in the past two years, direct investment
inflows have been elevated by the extraordinary level
of cross-border merger and acquisition activity. Portfolio flows have also been affected by this activity.
For example, in recent years, many of the largest
acquisitions have been financed by swaps of equity
in the foreign acquiring firm for equity in the U.S.
firm being acquired. The Bureau of Economic Analysis estimates that U.S. residents acquired $123 billion
of foreign equities in this way last year. Separate data
on market transactions indicate that U.S. residents
made net purchases of Japanese equities but sold
European equities. The latter sales likely reflect a
rebalancing of portfolios after stock swaps. U.S.
direct investment in foreign economies has also
remained strong, exceeding $30 billion in the first
quarter of 2000. Again, a significant portion of this
The labor market in early 2000 continued to be
characterized by substantial job creation, a historically low level of unemployment, and sizable
advances in productivity that have held labor costs in
check. The rise in overall nonfarm payroll employment, which totaled more than IV2 million over the
first half of the year, was swelled by the federal
government's hiring of intermittent workers to conduct the decennial census. Apart from that temporary
boost, which accounted for about one-fourth of the
net gain in jobs between December and June, nonfarm payroll employment increased an average of
190,000 per month, somewhat below the robust pace
of the preceding four years.
Monthly changes in private payrolls were uneven
at times during the first half the year, but, on balance,
the pace of hiring, while still solid, appears to have
moderated between the first and second quarters. In
some industries, such as construction, the pattern
appears to have been exaggerated by unseasonably
high levels of activity during the winter that acceler-
Net change in total nonfarm payroll employment
Thousands of jobs, monthly average
Hiring for
_
the Census
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
400
Monetary Policy Report to the Congress
ated hiring that typically would have occurred in
the spring. After a robust first quarter, construction
employment declined between April and June; on
average, hiring in this industry over the first half of
the year was only a bit slower than the rapid pace that
prevailed from 1996 to 1999. However, employment
gains in the services industry, particularly in business
and health services, were smaller in the second quarter than in the first while job cutbacks occurred
in finance, insurance, and real estate after four and
one-half years of steady expansion. Nonetheless,
strong domestic demand for consumer durables and
business equipment, along with support for exports
from the pickup in economic activity abroad, led to a
leveling off in manufacturing employment over the
first half of 2000 after almost two years of decline.
And, with consumer spending brisk, employment
at retail establishments, although fluctuating widely
from month to month, remained generally on a solid
uptrend over the first half.
The supply of labor increased slowly in recent
years relative to the demand for workers. The labor
force participation rate was unchanged, on average,
at 67.1 percent from 1997 to 1999; that level was just
0.6 percentage point higher than at the beginning of
the expansion in 1990. The stability of the participation rate over the 1997-99 period was somewhat
surprising because the incentives to enter the workforce seemed powerful: Hiring was strong, real wages
were rising more rapidly than earlier in the expansion, and individuals perceived that jobs were plentiful. However, the robust demand for new workers
instead led to a substantial decline in unemployment,
and the civilian jobless rate fell from 5XA percent at
Measures of labor utilization
Percent
—
1970
1975
1980
1985
1990
1995
3
2000
NOTE. The augmented unemployment rate is the number of unemployed plus
those who are not in the labor force and want a job, divided by the civilian labor
force plus those who are not in the labor force and want a job. The break in data
at January 1994 marks the introduction of a redesigned survey; data from that
point on are not directly comparable with those of earlier periods.
553
the beginning of 1997 to just over 4 percent at the
end of 1999.
This year, the labor force participation rate ratcheted up sharply over the first four months of the year
before dropping back in recent months as employment slowed. The spike in participation early this
year may have been a response to ready availability
of job opportunities, but Census hiring may also have
temporarily attracted some individuals into the workforce. On net, growth of labor demand and supply
have been more balanced so far this year, and the
unemployment rate has held near its thirty-year low
of 4 percent. At midyear, very few signs of a significant easing in labor market pressures have surfaced.
Employers responding to various private surveys of
business conditions report that they have been unable
to hire as many workers as they would like because
skilled workers are in short supply and competition
from other firms is keen. Those concerns about hiring
have persisted even as new claims for unemployment
insurance have drifted up from very low levels in the
past several months, suggesting that some employers
may be making workforce adjustments in response to
slower economic activity.
Labor Costs and Productivity
Reports by businesses that workers are in short supply and that they are under pressure to increase
compensation to be competitive in hiring and retaining employees became more intense early this year.
However, the available statistical indicators are providing somewhat mixed and inconsistent signals of
whether a broad acceleration in wage and benefit
costs is emerging. Hourly compensation, as measured
by the employment cost index (ECI) for private nonfarm businesses, increased sharply during the first
quarter to a level more than AVi percent above a year
earlier. Before that jump, year-over-year changes in
the ECI compensation series had remained close to
3V2 percent for three years. However, an alternative
measure of compensation per hour, calculated as part
of the productivity and cost series, which has shown
higher rates of increase than the ECI in recent years,
slowed in the first quarter of this year. For the nonfarm business sector, compensation per hour in the
first quarter was 4LA percent higher than a year earlier; in the first quarter of 1999, the four-quarter
change was 5LA percent.3
3. The figures for compensation per hour in the nonfinancial corporate sector are similar: an increase of about 4 percent for the year
ending in the first quarter of this year compared with almost 5 Vi percent for the year ending in the first quarter of 1999.
554
Federal Reserve Bulletin • August 2000
Change in output per hour for the nonfarm business sector
Measures of the change in hourly compensation
Percent, Q4 to Q4
Percent, Q4 to Q4
6
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
NOTE. The ECI is for private industry excluding farm and household workers. Nonfarm compensation per hour is for the nonfarm business sector.
Part of the acceleration in the ECI in the first
quarter was the result of a sharp step-up in the wage
and salary component of compensation change.
While higher rates of straight-time pay were widespread across industry and occupational groups, the
most striking increase occurred in the finance, insurance, and real estate industry where the year-overyear change in wages and salaries jumped from about
4 percent for the period ending in December 1999 to
almost 8V2 percent for the period ending in March of
this year. The sudden spike in wages in that sector
could be related to commissions that are tied directly
to activity levels in the industry and, thus, would not
represent a lasting influence on wage inflation. For
other industries, wages and salaries accelerated moderately, which might appear plausible in light of
reports that employers are experiencing shortages of
some types of skilled workers. However, the uptrend
in wage inflation that surfaced in the first-quarter ECI
has not been so readily apparent in the monthly data
on average hourly earnings of production or nonsupervisory workers, which are available through June.
Although average hourly earnings increased at an
annual rate of 4 percent between December and June,
the June level of hourly wages stood 33A percent
higher than a year earlier, the same as the increase
between June 1998 and June 1999.
While employers in many industries appear to have
kept wage increases moderate, they may be facing
greater pressures from rising costs of employee benefits. The ECI measure of benefit costs rose close to
3V2 percent during 1999, a percentage point faster
than during 1998; these costs accelerated sharply
further in the first quarter of this year to a level
5 V2 percent above a year earlier. Much of last year's
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
NOTE. The value for 2000:Q1 is the percent change from a year earlier.
pickup in benefit costs was associated with faster
rates of increase in employer contributions to health
insurance, and the first-quarter ECI figures indicated
another step-up in this component of costs. Private
survey information and available measures of prices
in the health care industry suggest that the upturn in
the employer costs of health care benefits is associated with both higher costs of health care and
employers' willingness to offer attractive benefit
packages in order to compete for workers in a tight
labor market. Indeed, employers have been reporting
that they are enhancing compensation packages with
a variety of benefits in order to hire and retain
employees. Some of these offerings are included in
the ECI; for instance, the ECI report for the first
quarter noted a pickup in supplemental forms of pay,
such as overtime and nonproduction bonuses, and in
paid leave. However, other benefits cited by employers, including stock options, hiring and retention
bonuses, and discounts on store purchases, are not
measured in the ECI.4 The productivity and costs
measure of hourly compensation may capture more
of the non-wage costs that employers incur, but even
for that series, the best estimates of employer compensation costs are available only after business
reports for unemployment insurance and tax records
are tabulated and folded into the annual revisions of
the national income and product accounts.
Because businesses have realized sizable gains in
worker productivity, compensation increases have
4. Beginning with publication of the ECI for June 2000, the Bureau
of Labor Statistics plans to expand the definition of nonproduction
bonuses in the ECI to include hiring and retention bonuses. These
payments are already included in the wage and salary measure underlying the data on compensation per hour calculated for the productivity and cost series.
Monetary Policy Report to the Congress
2.
Change in unit labor costs for the nonfarm business sector
555
Alternative measures of price change
Percent, annual rate
Percent, Q4 to Q4
1997:Q4
to
1998:Q4
1998:Q4
to
1999:Q4
1999:Q4
to
2000:Q1
Chain-type
Gross domestic product
Gross domestic purchases
Personal consumption expenditures . . .
Excluding food and energy
1.0
.7
.9
1.3
1.6
1.9
2.0
1.5
3.0
3.5
3.5
2.2
Fixed-weight
Consumer price index
Excluding food and energy
1.5
2.4
2.6
2.1
4.0
2.3
Price measure
3.0
2.5
2.0
—
1.5
—
1.0
NOTE. A fixed-weight index uses quantity weights from the base year to
aggregate prices from each distinct item category. A chain-type index is the
geometric average of two fixed-weight indexes and allows the weights to change
each year. Changes are based on quarterly averages.
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
NOTE. The value for 2000:Q1 is the percent change from a year earlier.
not generated significant pressure on overall costs of
production. Output per hour in the nonfarm business
sector posted another solid advance in the first quarter, rising to a level 33A percent above a year earlier
and offsetting much of the rise in hourly compensation over the period. For nonfinancial corporations,
the subset of the nonfarm business sector that
excludes types of businesses for which output is
measured less directly, the 4 percent year-overyear increase in productivity held unit labor costs
unchanged.
With the further robust increases in labor productivity recently, the average rise in output per hour in
the nonfarm business sector since early 1997 has
stepped up further to 3 percent from the 2 percent
pace of the 1995-97 period. What has been particularly impressive is that the acceleration of productivity in the past several years has exceeded the
pickup in output growth over the period and, thus,
does not appear to be simply a cyclical response to
more rapidly rising demand. Rather, businesses are
likely realizing substantial and lasting payoffs from
their investment in equipment and processes that
embody the technological advances of the past several years.
goods and services purchased by consumers, businesses, and governments has been somewhat greater:
The chain-type price index for gross domestic purchases rose at an annual rate of 3'/2 percent in the first
quarter after having increased about 2 percent during
1999 and just 3A percent during 1998.
The pass-through of the steep rise in the cost of
imported crude oil that began in early 1999 and
continued into the first half of this year has been the
principal factor in the acceleration of the prices of
goods and services purchased. The effect of higher
energy costs on domestic prices has been most apparent in indexes of prices paid by consumers. After
having risen 12 percent during 1999, the chain-type
price index for energy items in the price index for
personal consumption expenditures (PCE) jumped at
an annual rate of 35 percent in the first quarter of
2000; the first-quarter rise in the energy component
of the CPI was similar.
Swings in energy prices continued to have a noticeable effect on overall measures of consumer prices
Change in consumer prices
Percent, Q4 to Q4
I I Chain-type price index for PCE
H Consumer price index
Ql
Q2
Prices
Rates of increase in the broader measures of prices
moved up further in early 2000. After having accelerated from 1 percent during 1998 to IV2 percent last
year, the chain-type price index for GDP—prices of
goods and services that are produced domestically—
increased at an annual rate of 3 percent in the first
quarter of this year. The upswing in inflation for
—
2
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
NOTE. Consumer price index for all urban consumers. Values for 2000:Q1
and Q2 are percent changes from the previous quarter at an annual rate.
556
Federal Reserve Bulletin • August 2000
in the second quarter. After world oil prices dropped
back temporarily in the spring, the domestic price of
motor fuel dropped in April and May, and consumer
prices for energy, as measured by the CPI, retraced
some of the first-quarter increase. As a result, the
overall CPI was little changed over the two months.
However, with prices of crude oil having climbed
again, the bounceback in prices of motor fuel led to
a sharp increase in the CPI for energy in June. In
addition, with strong demand pressing against available supplies, consumer prices of natural gas continued to rise rapidly in the second quarter. In contrast to
the steep rise in energy prices, the CPI for food has
risen slightly less than other non-energy prices so far
this year.
Higher petroleum costs also fed through into higher
producer costs for a number of intermediate materials. Rising prices for inputs such as chemicals and
paints contributed importantly to the acceleration in
the producer price index for intermediate materials
excluding food and energy from about 13A percent
during 1999 to an annual rate of 3V2 percent over the
first half of this year. Upward pressure on input prices
was also apparent for construction materials, although
these have eased more recently. Prices of imported
industrial supplies also picked up early this year
owing to higher costs of petroleum inputs.
Core consumer price inflation has also been running a little higher so far this year. The chain-type
price index for personal consumption expenditures
other than food and energy increased at an annual
rate of 2LA percent in the first quarter compared with
an increase of 1Vi percent during 1999. Based on the
monthly estimates of PCE prices in April and May,
core PCE price inflation looks to have been just a
Change in consumer prices excluding food and energy
Percent, Q4 to Q4
•
—
Chain-type price index for PCE
M Consumer price index
1991
1992
1993
1994
1995
—
1996
1997
1998
1999
6
2000
NOTE. Consumer price index for all urban consumers. Values for 2000:Q1
and Q2 are percent changes from the previous quarter at an annual rate.
little below its first-quarter rate. After having risen
just over 2 percent between the fourth quarter of 1998
and the fourth quarter of 1999, the CPI excluding
food and energy increased at an annual rate of
2 LA percent in the first quarter of 2000 and at a
23/4 percent rate in the second quarter. In part, the rise
in core inflation likely reflects the indirect effects of
higher energy costs on the prices of a variety of
goods and services, although these effects are difficult to quantify with precision. Moreover, prices of
non-oil imported goods, which had been declining
from late 1995 through the middle of last year, continued to trend up early this year.
The pickup in core inflation, as measured by the
CPI, has occurred for both consumer goods and services. Although price increases for nondurable goods
excluding food and energy moderated, prices of consumer durables, which had fallen between 1996 and
1999, were little changed, on balance, over the first
half of this year. The CPI continued to register steep
declines for household electronic goods and computers, but prices of other types of consumer durables
have increased, on net, so far this year. The rate of
increase in the prices of non-energy consumer services has also been somewhat faster; the CPI for
these items increased at an annual rate of 3V2 percent
during the first two quarters of this year compared
with a rise of 23/4 percent in 1999. Larger increases
in the CPI measures of rent and of medical services
have contributed importantly to this acceleration.
Another factor has been a steeper rise in airfares,
which have been boosted in part to cover the higher
cost of fuel.
In addition to slightly higher core consumer price
inflation, the national income and product accounts
measure of prices for private fixed investment goods
shows that the downtrend in prices for business
fixed investment items has been interrupted. Most
notably, declines in the prices of computing equipment became much smaller in the final quarter of last
year and the first quarter of this year. A series of disruptions to the supply of component inputs to computing equipment has combined with exceptionally
strong demand to cut the rate of price decline
for computers, as measured by the chain-type price
index, to an annual rate of 12 percent late last year
and early this year—half the pace of the preceding
three and one-half years. At the same time, prices of
other types of equipment and software continued to
be little changed, and the chain-type index for nonresidential structures investment remained on a moderate uptrend. In contrast, the further upward pressure
on construction costs at the beginning of the year
continued to push the price index for residential
Monetary Policy Report to the Congress
construction higher; after having accelerated from
3 percent to 3V2 percent between 1998 and 1999, this
index increased at an annual rate of 4LA percent in the
first quarter of 2000.
Although actual inflation moved a bit higher over
the first half of 2000, inflation expectations have been
little changed. Households responding to the Michigan SRC survey in June were sensitive to the adverse
effect of higher energy prices on their real income but
seemed to believe that the inflationary shock would
be short-lived. The median of their expected change
in CPI inflation over the coming twelve months was
2.9 percent. Moreover, they remained optimistic that
inflation would remain at about that rate over
the longer run, reporting a 2.8 percent median of
expected inflation during the next five to ten years. In
both instances, their expectations are essentially the
same as at the end of 1999, although the year-ahead
expectations are above the lower levels that had
prevailed in 1997 and early 1998.
U.S. Financial
Markets
Conditions in markets for private credit firmed on
balance since the end of 1999. Against a backdrop of
continued economic vitality in the United States and
a tighter monetary policy stance, private borrowing
rates are higher, on net, particularly those charged to
riskier borrowers. In addition, banks have tightened
terms and standards on most types of loans. Higher
real interest rates—as measured based on inflation
expectations derived from surveys and from yields
on the Treasury's inflation-indexed securities—
account for the bulk of the increase in interest rates
Selected Treasury rates, daily data
Percent
J FMAMJ J A S O N D J FMAMJ J A S O N D J FMAMJ J
1998
1999
2000
NOTE. Last observations are for July 17, 2000.
557
Selected Treasury rates, quarterly data
Percent
—
~ j
Jj
—
\J t
J\
l
ft
Thirty-year
aaL
Treasury
aJM
i
JrYf
V
lA /
»l#
V
—
14
—
12
—
10
—
Q2
8
6
Five-year J C
~
V
Treasury
\
1
/
/
Three-month
—
^
Treasury
1 1 II i 1 1 1 1 II 11 II 1 1 1 1 1 II 1 1 1 II 1 t 1 1 1 II M i l
1964 1969
1974
1979
1984
1989
1994
1999
«r
*
4
NOTE. The twenty-year Treasury bond rate is shown until the first issuance
of the thirty-year Treasury bond in February 1977. Last observations are for
2000:Q2.
this year, with short-term real rates having increased
the most. Rising market interest rates and heightened
uncertainties about corporate prospects, especially
with regard to the high-tech sector, have occasionally
dampened flows in the corporate bond market and
have weighed on the equity market, which has, at
times, experienced considerable volatility. Through
mid-July, the broad-based Wilshire 5000 equity index
was up approximately 3 percent for the year.
Interest Rates
As the year began, with worries related to the century
date change out of the way, participants in the fixedincome market turned their attention to the signs of
continued strength in domestic labor and product
markets, and they quickly priced in the possibility of
a more aggressive tightening of monetary policy.
Both private and Treasury yields rose considerably.
In the latter part of January, however, Treasury yields
plummeted, especially those on longer-dated securities, as the announced details of the Treasury's debt
buyback program and upwardly revised forecasts of
federal budget surpluses led investors to focus
increasingly on the prospects for a diminishing supply of Treasury securities. A rise in both nominal and
inflation-indexed Treasury yields in response to
strong economic data and tighter monetary policy in
April and May was partly offset by supply factors and
by occasional safe haven flows from the volatile
equity market. Since late May, market interest rates
have declined as market participants have interpreted
the incoming economic data as evidence that mone-
558
Federal Reserve Bulletin • August 2000
Selected yield curves, July 17, 2000
Spread of BBB corporate yields
Percentage points
Percent
/ " " " " " " i n t e r e s t rate swaps
—
7.1
—
—
6.9
—
—
6.7
—
Treasury securities
—
1
I
2
1
5
1
10
1
20
—
6.5
—
6.3
—
6.1
^ ^
5.9
—
5.7
1
30
Years to maturity
—
jy—
2.5
—
2.0
—
1.5
Over ten-year Treasury yield
J
a/"
*
\
Over ten-year swap rate
rJ r
w
-
—
1
I
1998
I
1999
.5
1
2000
NOTE. Last observations are for July 17, 2000. The data are daily.
SOURCE. Swap rates are from the International Swaps and Derivatives Association, as reported by Reuters.
tary policy might not have to be tightened as much as
had been previously expected. On balance, while
Treasury bill rates and yields on shorter-dated notes
have risen 15 to 80 basis points since the beginning
of the year, intermediate- and long-term Treasury
yields have declined 5 to 55 basis points. In the
corporate debt market, by contrast, bond yields have
risen 10 to 70 basis points so far this year.
Forecasts of steep declines in the supply of longerdated Treasuries have combined with tighter monetary policy conditions to produce an inverted Treasury yield curve, starting with the two-year maturity.
In contrast, yield curves elsewhere in the U.S. fixedincome market generally have not inverted. In the
interest rate swap market, for instance, the yield
curve has remained flat to upward sloping for maturities as long as ten years, and the same has been true
for yield curves for the most actively traded corporate
bonds.5 Nonetheless, private yield curves are flatter
than usual, suggesting that, although supply considerations have played a potentially important role in the
inversion of the Treasury yield curve this year, investors' forecasts of future economic conditions have
also been a contributing factor. In particular, private
yield curves are consistent with forecasts of a mod-
5. A typical interest rate swap is an agreement between two parties
to exchange fixed and variable interest rate payments on a notional
principal amount over a predetermined period ranging from one to
thirty years. The notional amount itself is never exchanged. Typically,
the variable interest rate is the London Interbank Offered Rate
(LIBOR), and the fixed interest rate—called the swap rate—is determined in the swap market. The overall credit quality of market
participants is high, typically A or above; those entities with credit
ratings of BBB or lower are generally either rejected or required to
adopt credit-enhancing mechanisms, typically by posting collateral.
eration in economic growth and expectations that the
economy will be on a sustainable, non-inflationary
track, with little further monetary policy tightening.
The disconnect between longer-term Treasury and
private yields as a consequence of supply factors
in the Treasury market is distorting readings from
yield spreads. For instance, taken at face value, the
spread of BBB corporate yields over the yield on the
ten-year Treasury note would suggest that conditions
in the corporate bond market so far in 2000 are worse
than those during the financial market turmoil of
1998. In contrast, the spread of the BBB yield over
the ten-year swap rate paints a very different picture,
with spreads up this year but below their peaks in
1998. Although the swap market is still not as liquid
as the Treasury securities market, and swap rates are
occasionally subject to supply-driven distortions,
such distortions have been less pronounced and more
short-lived than those affecting the Treasury securities market of late, making swap rates a better benchmark for judging the behavior of other corporate
yields.
Aware that distortions to Treasury yields are likely
to become more pronounced as more federal debt is
paid down, market participants have had to look for
alternatives to the pricing and hedging roles traditionally played by Treasuries in U.S. financial markets. In
addition to interest rate swaps, which have featured
prominently in the list of alternatives to Treasuries,
debt securities issued by the three governmentsponsored housing agencies—Fannie Mae, Freddie
Mac, and the Federal Home Loan Banks—have been
used in both pricing and hedging. The three housing
agencies have continued to issue a substantial volume
of debt this year in an attempt to capture benchmark
status, and the introduction in March of futures and
Monetary Policy Report to the Congress
options contracts based on five- and ten-year notes
issued by Fannie Mae and Freddie Mac may help
enhance the liquidity of the agency securities market.
Nonetheless, the market for agency debt has been
affected by some uncertainty this year regarding the
agencies' special relationship with the government.
Both the Treasury and the Federal Reserve have
suggested that it would be appropriate for the Congress to consider whether the special standing of
these institutions continues to promote the public
interest, and pending legislation would, among other
things, restructure the oversight of these agencies and
reexamine their lines of credit with the U.S. Treasury.
The implementation of monetary policy, too, has
had to adapt to the anticipated paydowns of marketable federal debt. Recognizing that there may be
limitations on its ability to rely as much as previously
on transactions in Treasury securities to meet the
reserve needs of depositories and to expand the supply of currency, the FOMC decided at its March 2000
meeting to facilitate until its first meeting in 2001 the
Trading Desk's ability to continue to accept a broader
range of collateral in its repurchase transactions. The
initial approvals to help expand the collateral pool
were granted in August 1999 as part of the Federal
Reserve's efforts to better manage possible disruptions to financial markets related to the century date
change.
At the March 2000 meeting, the Committee also
initiated a study to consider alternative asset classes
and selection criteria that could be appropriate for the
System Open Market Account (SOMA) should the
size of the Treasury securities market continue to
decline. For the period before the completion and
review of such a study, the Committee discussed, at
its May meeting, some changes in the management of
the System's portfolio of Treasury securities in an
environment of decreasing Treasury debt. The
changes aim to prevent the System from coming to
hold high and rising proportions of new Treasury
debt issues. They will also help the SOMA to limit
any further lengthening of the average maturity of its
portfolio while continuing to meet long-run reserve
needs to the greatest extent possible through outright
purchases of Treasury securities.6 The SOMA will
cap the rollover of its existing holdings at Treasury
auctions and will engage in secondary market purchases according to a schedule that effectively will
6. The FOMC prefers a portfolio with a short average maturity
because the higher turnover rate of such a portfolio gives it greater
flexibility to redeem securities in times of financial market stress,
which may require substantial decreases in the securities portfolio
over a relatively short period, such as during an acute banking crisis
that involves heavy lending through the discount window.
559
Major stock price indexes
Index, June 30,1999 = 100
220
Nasdaq
1998
1999
—
200
2000
NOTE. The data are daily. Last observations are for July 17, 2000.
result in a greater percentage of holdings of shorterterm security issues than of longer-dated ones. The
schedule ranges from 35 percent of an individual
issue for Treasury bills to 15 percent for longer-term
bonds. These changes were announced to the public
on July 5, replacing a procedure in which all maturing holdings were rolled over and in which coupon
purchases were spread evenly across the yield curve.
Equity Prices
Major equity indexes have posted small gains so far
this year amid considerable volatility. Fluctuations in
technology stocks have been particularly pronounced:
After having reached a record high in March—
24 percent above its 1999 year-end value—the
Nasdaq composite index, which is heavily weighted
toward technology shares, swung widely and by midJuly was up 5 percent for the year. Given its surge in
the second half of 1999, the mid-July level of the
Nasdaq was about 60 percent above its mid-1999
reading. The broader S&P 500 and Wilshire 5000
indexes have risen close to 3 percent since the beginning of the year and are up about 10 percent and
13 percent, respectively, from mid-1999.
Corporate earnings reports have, for the most part,
exceeded expectations, and projections of future
earnings continue to be revised higher. However, the
increase in interest rates since the beginning of the
year likely has restrained the rise in equity prices. In
addition, growing unease about the lofty valuations
reached by technology shares and rising default rates
in the corporate sector may have given some investors a better appreciation of the risks of holding
560
Federal Reserve Bulletin • August 2000
stocks in general. Reflecting the uncertainty about
the future course of the equity market, expected and
actual volatilities of stock returns rose substantially
in the spring. At that time, volatility implied by
options on the Nasdaq 100 index surpassed even the
elevated levels reached during the financial market
turmoil of 1998.
Higher volatility and greater investor caution had
a marked effect on public equity offerings. The pace
of initial public offerings has fallen off considerably
in recent months from its brisk first-quarter rate, with
some offerings being canceled or postponed and others being priced well short of earlier expectations. On
the other hand, households' enthusiasm for equity
mutual funds, especially those funds that invest in the
technology and international sectors, remains relatively high, although it appears to have faded some
after the run-up in stock market volatility in the
spring. Following a first-quarter surge, net inflows
to stock funds moderated substantially in the second
quarter but still were above last year's average pace.
Debt and the Monetary
Aggregates
Debt and Depository Intermediation
The total debt of the U.S. household, government,
and nonfinancial business sectors is estimated to have
increased at close to a 5VZ percent annual rate in the
first half of 2000. Outside the federal government
sector, debt expanded at an annual rate of roughly
9 VI percent, buoyed by strength in household and
business borrowing. Continued declines in federal
debt have helped to ease the pressure on available
savings and have facilitated the rapid expansion of
nonfederal debt outstanding: The federal government
paid down $218 billion of debt over the first half of
2000, compared with paydowns of $56 billion and
$101 billion in the first six months of calendar years
1998 and 1999 respectively.
Depository institutions have continued to play an
important role in meeting the strong demands for
credit by businesses and households. Adjusted for
mark-to-market accounting rules, credit extended by
commercial banks rose 11 VI percent in the first half
of 2000. This advance was paced by a brisk expansion of loans, which grew at an annual rate of nearly
13 percent over this period. Bank credit increased in
part because some businesses sought bank loans as an
alternative to a less receptive corporate bond market.
In addition, the underlying strength of household
spending helped boost the demand for consumer and
mortgage loans. Banks' holdings of consumer and
mortgage loans were also supported by a slower pace
of securitizations this year. In the housing sector, for
instance, the rising interest rate environment has kept
the demand for adjustable-rate mortgages relatively
elevated, and banks tend to hold these securities on
their books rather than securitize them.
Banks have tightened terms and standards on loans
further this year, especially in the business sector,
where some lenders have expressed concerns about a
more uncertain corporate outlook. Bank regulators
have noted that depository institutions need to take
particular care in evaluating lending risks to account
for possible changes in the overall macroeconomic
environment and in conditions in securities markets.
Growth of domestic nonfinancial debt
•
P
•
Total
Federal
Nonfederal
1990
1991
1992
1993
1994
1995
NOTE. Total debt consists of the outstanding credit market debt of the U.S.
government, state and local governments, households and nonprofit organizations, nonfinancial businesses, and farms. Annual growth rates are computed
from average for fourth quarter of preceding year to average for fourth quarter
1996
1997
1998
1999
2000
of year indicated. Growth in the first half of 2000 is computed from average for
fourth quarter of 1999 to average for the second quarter of 2000 and expressed
at an annual rate. The growth rate for 2000:H1 is currently based on partially
estimated data.
Monetary Policy Report to the Congress
M2 growth rate
561
M3 growth rate
Percent, annual rate
Percent, annual rate
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2 0 0 0
NOTE. M2 consists of currency, travelers checks, demand deposits, other
checkable deposits, savings deposits (including money market deposit accounts),
small-denomination time deposits, and balances in retail money market funds.
See note to the domestic nonfinancial debt chart for details on the computation
of growth rates.
The Monetary Aggregates
Growth of the monetary aggregates over the first half
of 2000 has been buffeted by several special factors.
The unwinding of the buildups in liquidity that
occurred in late 1999 before the century date change
depressed growth in the aggregates early this year.
Subsequently, M2 rebounded sharply in anticipation
of outsized tax payments in the spring and then ran
off as those payments cleared. On net, despite the
cumulative firming of monetary policy since June
1999, M2 expanded at a relatively robust, 6 percent,
annual rate during the first half of 2000—the same
M2 velocity and the opportunity cost of holding M2
Ratio scale
1978
Percentage points, ratio scale
1983
1988
1993
1998
NOTE. The data are quarterly and are through 2000:Q1. The velocity of M2 is
the ratio of nominal gross domestic product to the stock of M2. The opportunity
cost of M2 is a two-quarter moving average of the difference between the
three-month Treasury bill rate and the weighted-average return on assets
included in M2.
NOTE. M3 consists of M2 plus large-denomination time deposits, balances
on institutional money market funds, RP liabilities (overnight and term), and
eurodollars (overnight and term). See note to the domestic nonfinancial debt
chart for details on the computation of growth rates.
pace as in 1999—supported by the rapid expansion of
nominal spending and income.
M2 velocity—the ratio of nominal income to M2—
has increased over the first half of this year, consistent with its historical relationship with the interest
forgone ("opportunity cost") from holding M2. As
usual, rates offered on many of the components of
M2 have not tracked the upward movement in market
interest rates, and the opportunity cost of holding M2
has risen. In response, investors have reallocated
some of their funds within M2 toward those components whose rates adjust more quickly—such as small
time deposits—and have restrained flows into M2 in
favor of longer-term mutual funds and direct holdings of market instruments.
M3 expanded at an annual rate of 9 percent in the
first half of 2000, up from IV2 percent for all of 1999.
The robust expansion of bank credit underlies much
of the acceleration in M3 this year. Depository institutions have issued large time deposits and other
managed liabilities in volume to help fund the expansion of their loan and securities portfolios. In contrast, flows to institutional money funds slowed from
the rapid pace of late 1999 after the heightened
preference for liquid assets ahead of the century date
change ebbed.
As has been the case since 1994, depository institutions have continued to implement new retail sweep
programs over the first half of 2000 in order to avoid
having to hold non-interest-bearing reserve balances with the Federal Reserve System. As a result,
required reserve balances are still declining gradually, adding to concerns that, under current procedures, low balances might adversely affect the imple-
562
Federal Reserve Bulletin • August 2000
mentation of monetary policy by eventually leading
to increased volatility in the federal funds market.
The pending legislation that would allow the Federal
Reserve to pay interest on balances held at Reserve
Banks would likely lead to a partial unwinding over
time of the ongoing trend in retail sweep programs.
International
Developments
In the first half of 2000, economic activity in foreign
economies continued the strong overall performance
that was registered last year. With a few exceptions,
most emerging-market countries continued to show
signs of solid recoveries from earlier recessions, supported by favorable financial market conditions.
Average real GDP in the foreign industrial countries
accelerated noticeably in the first half of this year
after a mild slowdown in late 1999. The pickup
reflected in large part better performance of Japanese
domestic demand (although its sustainability has been
questioned) and further robust increases in Europe
and Canada. In many countries, economic slack
diminished, heightening concern about inflation risks.
Foreign interest rates
Percent
Short-term (three-month)
U.K. interbank
—
^
Ml
Euro-area interbank
—
6
—
2
—
0
Japanese CD
+
—
j
I
l
Ql
i
i
Q2
I
I
Q3
1999
I
1
Q4
l
I
Ql
i
Q2
2000
Q3
NOTE. The data are weekly. Last observations are for the week ending
July 12, 2000.
Higher oil prices bumped up broad measures of inflation almost everywhere, but measures of core inflation edged up only modestly, if at all.
Monetary conditions generally were tightened in
foreign industrial countries, as authorities removed
stimulus by raising official rates. Yield curves in
several key industrial countries tended to flatten, as
interest rates on foreign long-term government securities declined on balance after January, reversing an
upward trend seen since the second quarter of 1999.
Yields on Japanese government long-term bonds
edged upward slightly, but at midyear still were only
about l3/4 percent.
Concerns in financial markets at the end of last
year about potential disruptions during the century
date change dissipated quickly, and global markets in
the early months of this year returned to the comparatively placid conditions seen during most of 1999.
Starting in mid-March, however, global financial
markets were jolted by several episodes of increased
volatility set off typically by sudden downdrafts in
U.S. Nasdaq prices. At that time, measures of market
risk for some emerging-market countries widened,
but they later retraced most of these increases. The
performances of broad stock market indexes in the
industrial countries were mixed, but they generally
tended to reflect their respective cyclical positions.
Stocks in Canada, France, and Italy, for example,
continued to make good gains, German stocks did
less well, and U.K. stocks slipped. Japanese shares
also were down substantially, even though the domestic economy showed some signs of firmer activity. In
general, price volatility of foreign high-tech stocks or
stock indexes weighted toward technology-intensive
sectors was quite high and exceeded that of corresponding broader indexes.
The dollar continued to strengthen during most of
the first half of the year. It appeared to be supported
mainly by continuing positive news on the performance of the U.S. economy, higher U.S. short-term
interest rates, and for much of the first half, expectations of further tightening of monetary policy. Early
in the year, the attraction of high rates of return on
U.S. equities may have been an additional supporting
factor, but the dollar maintained its upward trend
even after U.S. stock prices leveled off near the end
of the first quarter and then declined for a while. In
June, the dollar eased back a bit against the currencies of some industrial countries amid signs that U.S.
growth was slowing. Nevertheless, for the year so far,
the dollar is up on balance about 53A percent against
the major currencies; against a broader index of
trading-partner currencies, the dollar has appreciated
about 33/4 percent on balance.
Monetary Policy Report to the Congress
Nominal U.S. dollar exchange rates
First week 1999 = 100
X
Selected bilateral rates
, i
Ql
i
Q2
i
Q3
1999
I
Q4
i
Ql
i
Q2
2000
Q3
NOTE. The data are weekly. Indexes in the upper panel are trade-weighted
averages of the exchange value of the dollar against major currencies and
against the currencies of a broad group of important U.S. trading partners. Last
observations are for the week ending July 12, 2000.
The dollar has experienced a particularly large
swing against the euro. The euro started this year
already down more than 13 percent from its value
against the dollar at the time when the new European
currency was introduced in January 1999, and it
continued to depreciate during most of the first half
of 2000, reaching a record low in May. During this
period, the euro seemed to be especially sensitive to
news and public commentary by officials about the
strength of the expansion in the euro area, the pace of
economic reform, and the appropriate macroeconomic policy mix. Despite a modest recovery in
recent weeks, the euro still is down against the dollar
almost 7 percent on balance for the year so far and
about 33A percent on a trade-weighted basis.
The euro's persistent weakness posed a challenge
for authorities at the European Central Bank as they
sought to implement a policy stance consistent with
their official inflation objective (2 percent or less for
harmonized consumer prices) without threatening the
euro area's economic expansion. Supported in part
by euro depreciation, economic growth in the euro
563
area in the first half of 2000 was somewhat stronger
than the brisk 3 percent pace recorded last year.
Investment was robust, and indexes of both business
and consumer sentiment registered record highs. The
average unemployment rate in the area continued to
move down to nearly 9 percent, almost a full percentage point lower than a year earlier. At the end of the
first half, the euro-area broad measure of inflation,
partly affected by higher oil prices, was above 2 percent, while core inflation had edged up to 1 LA percent. Variations in the pace of economic expansion
and the intensity of inflation pressures across the
region added to the complexity of the situation confronting ECB policymakers even though Germany
and Italy, two countries that had lagged the euro-area
average expansion of activity in recent years, showed
signs that they were beginning to move ahead more
rapidly. After having raised its refinancing rate
50 basis points in November 1999, the ECB followed
with three 25-point increases in the first quarter and
another 50-point increase in June. The ECB pointed
to price pressures and rapid expansion of monetary
aggregates as important considerations behind the
moves.
Compared with its fluctuations against the euro,
the dollar's value was more stable against the Japanese yen during the first half of 2000. In late 1999,
private domestic demand in Japan slumped badly,
even though the Bank of Japan continued to hold
its key policy rate at essentially zero. Several times
during the first half of this year, the yen experienced
strong upward pressure, often associated with market
perceptions that activity was reviving and with speculation that the Bank of Japan soon might abandon its
zero-interest-rate policy. This upward pressure was
resisted vigorously by Japanese authorities on several
occasions with sales of yen in foreign exchange markets. The Bank of Japan continued to hold overnight
interest rates near zero through the first half of 2000.
The Japanese economy, in fact, did show signs of
stronger performance in the first half. GDP rose at an
annual rate of 10 percent in the first quarter, with
particular strength in private consumption and investment. Industrial production, which had made solid
gains last year, continued to expand at a healthy pace,
and surveys indicated that business confidence had
picked up. Demand from the household sector was
less robust, however, as consumer confidence was
held back by historically high unemployment. A large
and growing outstanding stock of public debt (estimated at more than 110 percent of GDP) cast increasing doubt about the extent to which authorities might
be willing to use additional fiscal stimulus to boost
demand. Even though some additional government
564
Federal Reserve Bulletin • August 2000
expenditure for coming quarters was approved in late
1999, government spending did not supply stimulus
in the first quarter. With core consumer prices moving down at an annual rate that reached almost 1 percent at midyear, deflation also remained a concern.
Economic activity in Canada so far this year
slowed a bit from its very strong performance in the
second half of 1999, but it still was quite robust,
generating strong gains in employment and reducing
the remaining slack in the economy. The expansion
was supported by both domestic demand and spillovers from the U.S. economy. Higher energy prices
pushed headline inflation to near the top of the Bank
of Canada's 1 percent to 3 percent target range; core
inflation remained just below 1V2 percent. The Canadian dollar weakened somewhat against the U.S. dollar in the first half of the year even though the Bank
of Canada raised policy interest rates 100 basis
points, matching increases in U.S. rates. In the United
Kingdom, the Bank of England continued a round of
tightening that started in mid-1999 by raising official
rates 25 basis points twice in the first quarter. After
March, indications that the economy was slowing
and that inflation pressures might be ebbing under
the effect of the tighter monetary stance and strength
of sterling—especially against the euro—allowed the
Bank to hold rates constant. In recent months, sterling has depreciated on balance as official interest
rates have been raised in other major industrial
countries.
In developing countries, the strong recovery of
economic activity last year in both developing Asia
and Latin America generally continued into the first
half of 2000. However, after a fairly placid period
that extended into the first few months of this year,
financial market conditions in some developing countries became more unsettled in the April-May period.
In some countries, exchange rates and equity prices
weakened and risk spreads widened, as increased
political uncertainty interacted with heightened financial market volatility and rising interest rates in
the industrial countries. In general, financial markets
now appear to be identifying and distinguishing those
emerging-market countries with problems more
effectively than they did several years ago.
In emerging Asia, the strong bounceback of activity last year from the crisis-related declines of 1998
continued into the first half of this year. Korea, which
recorded the strongest recovery in the region last year
with real GDP rising at double-digit rates in every
quarter, has seen some moderation so far in 2000.
However, with inventories still being rebuilt, unemployment declining rapidly, and inflation showing
no signs of accelerating, macroeconomic conditions
Emerging markets
First week 1999 = 100
Percentage points
EMBI+ spreads
1999
—
16
—
12
2000
NOTE. The data are weekly. EMBI+ (J.P. Morgan emerging market bond
index) spreads are stripped Brady-bond yield spreads over U.S. Treasuries. Last
observations are for the week ending July 12, 2000.
remained generally favorable, and the won came
under upward pressure periodically in the first half of
this year. Nonetheless, the acute financial difficulties
of Hyundai, Korea's largest industrial conglomerate,
highlighted the lingering effect on the corporate
and financial sectors of the earlier crisis and the need
for further restructuring. Economic activity in other
Asian developing countries that experienced difficulties in 1997 and 1998 (Thailand, Indonesia, Malaysia, Singapore, and the Philippines) also continued
to firm this year, but at varying rates. Nonetheless,
financial market conditions have deteriorated in
recent months for some countries in the region.
In Indonesia and the Philippines, declines in equity
prices and weakness in exchange rates appear to have
stemmed from heightened market concerns over
political instability and prospects for economic
reform. Output in China increased at near doubledigit annual rates in the second half of last year and
remained strong in the first half of this year, boosted
mainly by surging exports. In Hong Kong, real GDP
rose at an annual rate of more than 20 percent in the
Monetary Policy Report to the Congress
first quarter of this year after a strong second half in
1999. Higher consumer confidence appears to have
boosted private consumption, and trade flows through
Hong Kong, especially to and from China, have
increased.
The general recovery seen last year in Latin
America from effects of the emerging-market financial crisis extended into the first part of this year.
In Brazil, inflation was remarkably well contained,
and interest rates were lowered, but unemployment
has remained high. An improved financial situation
allowed the Brazilian government to repay most of
the funds obtained under its December 1998 international support package. However, Brazilian financial
markets showed continued volatility this year, especially at times of heightened market concerns over
the status of fiscal reforms, and risk premiums widened in the first half of 2000 on balance. In Mexico,
activity has been strong so far this year. In the first
quarter, real GDP surged at an annual rate of 11 per-
565
cent, boosted by strong exports to the United States,
soaring private investment, and increased consumer spending. Mexican equity prices and the
peso encountered some downward pressure in the
approach of the July 2 national election, but once the
election was perceived to be fair and the transition of
power was under way, both recovered substantially.
In Argentina, the pace of recovery appears to have
slackened in the early part of this year, as the government's fiscal position and, in particular, its ability to
meet the targets of its International Monetary Fund
program remained a focus of market concern. Heightened political uncertainty in Venezuela, Peru, Colombia, and Ecuador sparked financial market pressures
in recent months in those countries, too. In January,
authorities in Ecuador announced a program of "dollarization," in which the domestic currency would be
entirely replaced by U.S. dollars. The program, now
in the process of implementation, appears to have
helped stabilize financial conditions there.
•
566
Industrial Production and Capacity Utilization
for June 2000
Released for publication July 14
Industrial production rose 0.2 percent in June, after
gains of 0.5 percent in May and 0.8 percent in April.
At 144.6 percent of its 1992 average, industrial production in June was 5.8 percent higher than in
June 1999. For the second quarter as a whole, the
total index increased at an annual rate of 7.0 percent,
up from a first-quarter pace of 6.5 percent. The output
of mines and utilities picked up in the second quarter,
while the growth of manufacturing output remained
close to an annual rate of 7.0 percent for a third
consecutive quarter. The strength in manufacturing
this year has principally come from the hightechnology industries (computers, semiconductors,
and communications equipment); excluding those
industries, manufacturing has increased at an annual
rate of only 1.0 percent since the fourth quarter of last
Industrial production and capacity utilization
Ratio scale, 1992 = 100
Percent of capacity
Industrial production, market groups
Ratio scale, 1992 = 100
Ratio scale, 1992 = 100
155
155
145
145
135
135
125
125
115
115
105
105
95
95
Ratio scale, 1992 = 100
Ratio scale, 1992 = 100
Materials
Equipment
Business
120
Durable goods
100
Defense and space
80
Nondurable goods and energy
I
1990
1992
1994
1996
1998
2000
1990
1992
All series are seasonally adjusted. Latest series, June. Capacity is an index of potential industrial production.
1994
I
1996
I
I
1998
I
L
2000
567
Industrial production and capacity utilization, August 2000
Industrial production, index, 1992=100
Percentage change
2000
Category
20001
r
Apr/
May'
June?
Total
142.4
143.5
144.3
144.6
Previous estimate
142.6
143.6
144.2
Major market groups
Products, total2
Consumer goods . . .
Business equipment
Construction supplies
Materials
130.3
118.0
183.0
139.0
163.1
131.1
118.6
185.1
139.5
164.9
131.3
118.6
186.2
138.3
166.6
131.2
118.4
187.0
137.0
167.8
Major industry groups
Manufacturing
Durable
Nondurable
Mining
Utilities
148.4
184.6
113.6
101.3
110.8
149.3
186.7
113.6
101.5
114.8
150.0
188.4
113.4
101.3
117.7
150.5
189.7
113.2
102.4
114.7
Mar.
r
Mar.
Apr.
r
May'
June?
.8
.5
.2
5.8
.7
.4
.2
-.6
1.4
1.0
1.2
.6
.5
1.1
.4
1.1
.2
.0
.6
-.9
1.0
-.1
-.1
.4
-1.0
.7
3.5
1.3
9.2
3.3
9.6
.8
1.5
-.2
1.3
-3.9
.6
1.1
.0
.2
3.6
.4
.9
-.2
-.2
2.5
.3
.7
-.2
1.1
-2.5
6.4
10.2
1.6
5.5
-2.3
MEMO
Capacity utilization, percent
1999
Average,
1967-99
Total
82.0
Low,
1982
71.1
81.1
80.5
82.4
87.3
87.5
69.0
70.4
66.2
80.3
75.9
85.7
84.2
88.9
88.0
92.6
NOTE. Data seasonally adjusted or calculated from seasonally adjusted
monthly data.
1. Change from preceding month.
year. The rate of capacity utilization for total industry
edged down in June to 82.1 percent, a level about
even with the 1967-99 average.
MARKET
GROUPS
The output of consumer goods edged down 0.1 percent in June; an increase of 0.5 percent in the production of durable consumer goods was more than offset
by a decline in the production of nondurables. The
gain in the production of durable consumer goods
was the result of a 1.7 percent rebound in the output
of automotive products. In contrast, the output of
other consumer durable goods decreased 0.5 percent,
as the production of goods for the home, such as
appliances, furniture, and carpeting, fell again. The
decline in nondurable consumer goods was concentrated in energy products; the demand for electricity
by households, which had shot up in April and May,
fell back. The production of nondurable non-energy
Capacity,
percentage
change,
June 1999
to
June 2000
June
Mar.'
Apr.'
May'
June>>
80.5
81.7
82.1
82.2
82.1
3.8
81.8
82.1
82.1
81.1
80.2
83.7
84.7
86.1
81.3
80.5
83.8
85.0
89.1
81.3
80.8
83.3
84.9
91.3
81.3
80.9
82.8
85.9
88.9
4.2
5.4
1.7
-.9
1.3
Previous estimate
Manufacturing
Advanced processing
Primary processing .
Mining
Utilities
2000
High,
1988-89
85.4
June 1999
to
June 2000
79.6
78.6
82.7
80.7
92.1
2. Contains components in addition to those shown,
r Revised,
p Preliminary.
consumer goods edged up 0.1 percent, with solid
gains in the production of consumer chemicals and
paper products nearly offset by a decline in the output
of clothing.
The production of business equipment, which had
increased more than VA percent per month from
January to April, increased only 0.4 percent in June
after a 0.6 percent advance in May. The production of
high-technology equipment continued to rise strongly
in June: The production of information processing
and related equipment increased 1.3 percent on the
strength of advances in the output of communications
equipment and computers. The production index for
the other equipment category also turned up sharply
because of a jump in the output of farm machinery
and equipment. However, the output of transit equipment fell again in June because of a continued decline
in the production of commercial aircraft and a reduction in the production of medium and heavy trucks.
In addition, the production of industrial equipment
fell back 0.4 percent, largely reversing the gains in
568
Federal Reserve Bulletin • August 2000
April and May; most of the decrease reflected a
decline in the output of construction machinery.
The production index for construction supplies fell
1.0 percent in June after having decreased 0.9 percent
in May; for both months, declines in underlying
industries were widespread. Since peaking in April,
the index for construction supplies has retraced more
than half of the increase posted earlier in the year.
The output of materials was up 0.7 percent in June, a
gain somewhat smaller than the average for the preceding three months. The output of durable goods
materials rose 1.2 percent, with another strong
increase in the production of parts for equipment and
for consumer goods; however, the output of basic
metals fell again in June. The production of nondurable goods materials dropped 0.5 percent, and the
output of energy materials was unchanged.
INDUSTRY
GROUPS
Manufacturing output rose 0.3 percent in June, after
having advanced an average of 0.6 percent per month
since the end of last year. The production of durable
goods rose further, and the production of nondurable
goods declined again. Among durable goods, continued increases in the production of high-technology
goods accounted for most of the overall gain; however, output in some industries, such as primary metals and construction-related industries, has weakened
recently. The output of nondurables slipped another
0.2 percent, a move led by decreases in petroleum
refining and in the production of apparel and paper.
The factory operating rate, at 81.3 percent, was
unchanged. The utilization rate for primaryprocessing industries decreased to 82.8 percent, and
that for advanced-processing industries edged up, to
80.9 percent.
The output of utilities fell back 2.5 percent following sharp gains in the preceding two months; the
operating rate at utilities fell to 88.9 percent. Production at mines increased 1.1 percent after having
fallen 0.2 percent in May; the utilization rate at mines
rose to 85.9 percent.
•
569
Statements to the Congress
Statement by Laurence H. Meyer, Member, Board of
Governors of the Federal Reserve System, before the
Subcommittee on Capital Markets, Securities and
Government Sponsored Enterprises of the Committee
on Banking and Financial Services, U.S. House of
Representatives, June 7, 2000 (Governor Meyer presented identical testimony before the Subcommittee
on Financial Institutions and the Subcommittee on
Securities of the Committee on Banking, Housing,
and Urban Affairs, U.S. Senate, June 13, 2000.)
I appreciate the opportunity to explain the rules
recently proposed by the Federal Reserve Board and
the Department of the Treasury to allow financial
holding companies to engage in merchant banking
activities under the Gramm-Leach-Bliley (GLB)
Act. I want to stress that part of what I'm about to
discuss is only a proposal and that the rest is a rule
that has been adopted only on an interim basis. The
Board and the Treasury have requested comment
from the public on both parts, and both are subject to
review and modification in light of those comments.
Our experience has been that public comments are
generally very helpful, and we value the insight and
information they provide from practitioners, analysts,
other policymakers, and informed members of the
public. The public comment period ended on May 22,
and the Board and the Treasury are analyzing those
comments now.
As I'm sure you can appreciate, because we are in
this evaluation phase, I do not know what final rules
will be adopted. The staff is in the process of reviewing and analyzing the comments, and both Treasury
officials and members of the Board are reserving
judgment until we see both a summary of the full
comments and the staff's analysis. At that time, the
Board will review the proposal and the interim rule
in light of the comments, and both are subject to
revision. In addition, the Federal Financial Institutions Examination Council will be discussing bank
capital requirements on equity investments, a discussion that will, of course, be considered in the Board's
final decision on holding company capital requirements on these assets. With these caveats in mind, the
Board nonetheless believes it would be useful not
only to describe what the Board and the Treasury
proposed but also to summarize the information and
analysis we reviewed in developing our proposals.
Our initial proposal was based on a considerable
amount of information and experience regarding the
current equity investment activities of securities firms
and large banking organizations. It would allow merchant banking to continue to develop along the lines
already evident in the industry and in the manner
intended by the Congress. At the same time, the rule
and proposal attempt to address the boundaries
between merchant banking and the mixing of banking and commerce. And most important, the rule
seeks responsibly to come to grips with the very real
safety and soundness risks to an insured depository
institution affiliate of both a financial holding company that engages in merchant banking and a bank
holding company that invests in equities using existing authorities.
SUMMARY OF THE INTERIM RULE
CAPITAL
PROPOSAL
AND
Let me first briefly explain what the Board and the
Treasury have proposed. For the sake of brevity, I
will sacrifice some detail. The notice published by
the Board and the Treasury in the Federal Register
explains the proposal in great detail.1
The GLB Act allows financial holding companies—which are bank holding companies whose
depository institutions meet specified capital, management, and, for insured institutions, Community
Reinvestment Act requirements—to acquire shares,
assets, or ownership interests in any type of nonfinancial company. Merchant banking authority represents
a broad exception to the central prohibition in the
Bank Holding Company Act against the ownership
of interests in nonfinancial firms. Moreover, this
new merchant banking authority is in addition to—
and does not replace—the authority that bank holding
companies have under other provisions of the Bank
Holding Company Act to engage in equity investment activities.
The merchant banking authority included in the
GLB Act helped ensure a so-called two-way street
1. 65 Federal Register 16,460, 16,480 (March 28, 2000).
570
Federal Reserve Bulletin • August 2000
for securities firms that wish to affiliate with a bank
without being required to divest traditional business
lines. Before the GLB Act, securities firms could not
affiliate with a bank without terminating their merchant banking activities.
The GLB Act specifically authorizes the Board and
the Secretary of the Treasury to issue regulations
implementing this new authority, including limitations that we jointly deem appropriate to protect
depository institutions. The interim rule and capital
proposal are the result of extensive discussions
between Board and Treasury officials.
Before making our proposal, the staff reviewed
existing research and the staffs of the two agencies
jointly conducted interviews at several major securities firms and bank holding companies to gather
information on how the merchant banking business
is conducted. We also called on our experience in
supervising the more restricted investment authorities exercised by both member banks and bank holding companies, including authority to make investments through small business investment companies,
authority to make investments overseas, and holding company authority to make investments in up
to 5 percent of the voting shares and up to 25 percent
of the total equity of any company. Our proposal
incorporates many of the best practices employed by
merchant banking professionals and banking organizations and, we believe, would allow securities firms
to become financial holding companies while continuing to conduct their merchant banking activities.
The proposal is in two parts. The first is an interim
rule that contains the framework for defining and
conducting merchant banking activities. The second
is the capital proposal.
Interim Rule
The interim rule is designed to implement the provisions of the GLB Act that were enacted to prevent
merchant banking activities from being no different
than a mixture of banking and commerce. It also
supports the important objective of encouraging the
safe and sound exercise of this new merchant banking authority. The interim rule
• Provides guidance on the GLB Act's requirement that merchant banking investments be held only
for a period long enough to enable the sale or disposition of each investment on a reasonable basis. Generally, the rule permits a ten-year holding period for
direct investments and a fifteen-year holding period
for investments in private equity funds. The Board
may approve a longer holding period on a case-bycase basis.
• Implements the GLB Act's restrictions on the
routine management or operation of a portfolio company by a financial holding company. The interim
rule contains several safe harbors and examples of
routine management and explains the types of special
circumstances in which routine management is
permissible.
• Establishes recordkeeping and reporting requirements designed to enhance the ability of the financial
holding company and the Board to monitor the risks
and exposures of merchant banking investments and
compliance by the financial holding company with
the act's limitations on holding periods and routine
management. These recordkeeping and reporting
requirements are general in design and largely could
be met by the types of records and reports ordinarily
kept by companies engaged in merchant banking
activities.
• Implements the restrictions in the GLB Act on
the ability of a depository institution controlled by a
financial holding company to cross-market its products or services with a portfolio company it holds
under its merchant banking authority.
• Adopts the presumption established by the GLB
Act for applying the limits contained in section 23A
of the Federal Reserve Act on transactions between a
depository institution and its affiliates to transactions
between a depository institution and a portfolio
company controlled by the same financial holding
company.
As a transition measure, the interim rule also establishes two caps on the amount of merchant banking
investments that a financial holding company may
hold. The caps are high and apply only to investments made under the new merchant banking authority. The first is that the total amount of a financial
holding company's merchant banking investments
may not exceed the lesser of 30 percent of the financial holding company's tier 1 capital, or $6 billion.
The second cap applies to merchant banking investments other than investments made by the financial
holding company in private equity funds and is the
lesser of 20 percent of tier 1 capital, or $4 billion.
These caps do not apply to or limit in any way the
investments made by a financial holding company
under its other authorities, such as through small
business investment companies. Moreover, these caps
are really thresholds. The rule provides that a financial holding company may exceed these amounts
with approval from the Board.
Statements to the Congress
This approach allows the Board to monitor the
risk-management systems and exposure of financial
holding companies that devote a significant amount
of resources to merchant banking. We view the caps
as a safe and sound way to allow merchant banking
activities to begin and fully expect to revisit the need
for caps as we review the interim rule and the capital
proposal.
Capital Proposal
Perhaps the most important, but also most controversial, aspect of the proposal is the appropriate capital
treatment of equity investments for regulatory purposes. This part has been proposed for comment but,
unlike the portion I just described, has not been
adopted.
Our capital proposal would require bank holding
companies to maintain in equity form at least
50 cents of capital for every dollar the consolidated
bank holding company invests in merchant bankingtype investments. Under existing capital rules, a bank
holding company could hold only 4 cents of its own
equity capital—that is borrow 96 cents—for every
dollar invested in equity securities.
The proposed capital treatment would apply at the
holding company level on a consolidated basis to the
carrying value of investments made using the new
merchant banking authority as well as to investments
made in nonfinancial companies using other merchant banking-like investment authority.
It is to this issue of the capital charge, our reasons
for proposing it, and its implications that I now turn.
SAFETY AND SOUNDNESS
While safety and soundness sensitivities are reflected
in several components of the proposed regulation, an
important aspect of the proposal to address potential
safety and soundness concerns is the new capital
requirement. The Board's concern about the safety
and soundness of banking organizations, of course,
has to be balanced against other goals of the GLB
Act, and we sought to do so. Nonetheless, this aspect
of the proposal elicited the most comment and criticism. I believe, however, there can be little doubt
about either the importance of safety and soundness
or the Board's authority and responsibility in this
area. We note that, in its consideration of the financial
modernization legislation, the Congress considered
the appropriateness of capital standards at the holding
571
company level and did not limit the Board's authority
to develop appropriate capital requirements for bank
holding and financial holding companies.
Participation in the Equity Market by Banking
Organizations
Before the enactment of the GLB Act, banking organizations were permitted to invest in equities to a
limited extent. For example, the Small Business
Investment Act of 1958 permits banks, and the Bank
Holding Company Act permits their holding companies, to invest in certain small companies through
their ownership of Small Business Investment Companies (SBICs). Banking organizations also have
been authorized to match competition abroad by
investing in foreign companies through their
Edge Act affiliates and subsidiaries, and, under the
Bank Holding Company Act of 1956, bank holding
companies can invest in up to 5 percent of the voting
shares (and up to 25 percent of the total equity) of
any company. All of these authorizations, however,
have involved limits in one form or another: on size
or location of the individual portfolio companies, on
the proportion of each portfolio company acquired,
or on aggregate holdings.
The bulk of activity using these authorities has
involved private equity investments. The private
equity market is one in which transactions occur
largely in unregistered shares in private and public
companies. The market has grown quite rapidly in
recent years and in 1999 is estimated to have had at
least $400 billion outstanding. The venture capital
component, the equity financing of new firms, had
outstandings of at least $125 billion. It focuses on
seed capital for the creation of new companies or
equity needed for the continuation or growth of small
firms. The non-venture private equity sector, the
equity financing of middle-market firms and leveraged buyouts, is considerably larger, with outstandings of about $275 billion. The contribution of a
broad and deep private equity market to economic
growth is considerable and its existence is critical to
our nation's continued economic vibrancy.
Holding of Equities by Banking Organizations
Banking organizations play a modest, but not insignificant, role in the private equities market. Most
banking organizations in fact do not make use of their
existing authorities and, thus, do not participate in
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Federal Reserve Bulletin • August 2000
either the public or the private equities market. This
may reflect the lack of expertise required to participate in such finance at most banking organizations,
more traditional banking strategies, or the restrictions
and limits placed on their participation prior to the
passage of the GLB Act.
Most of the equity participation by banking organizations is concentrated in a small number of large
banking organizations, whose activities are focused
on the private equity market and, in some cases,
whose holdings account for a significant proportion
of their capital and earnings. In keeping with the
small number of banking organization participants,
their share of the market is small—about 9 percent to
10 percent of the private equities outstanding. Despite
their limited market share, the ten U.S. banking organizations with the largest commitment to equity
investments have about doubled their holdings in
the past five or so years, with aggregate investments
currently exceeding $30 billion at carrying values.
These holdings account for an estimated 90 percent
of holdings by all banking organizations of private
equities in nonfinancial firms. Seven of the ten largest
holders each held equities with carrying values in
excess of $1 billion at the end of 1999; two held more
than $8 billion. Carrying values at the largest holders
were equal to 10 percent to 35 percent of their tier 1
capital, and both realized and unrealized gains on
these holdings accounted for a growing share of
their earnings. Clearly at some large banking organizations, holdings of stock—mainly private equities—
already were large and rising before merchant
banking was authorized by the GLB Act. As supervisors, equity investment by banking organizations
had clearly gotten our attention well before last
November.
Larger banking organizations generally employ all
of the various legal authorities available to them in
making equity investments. In making investments in
private equity funds and direct investments, banking
organizations generally use Bank Holding Company
Act authorities, and several institutions have made
substantial international equity investments through
their Edge Act affiliates. SBICs are also used substantially by larger banking organizations and by some
regional and smaller institutions. There are roughly
100 SBICs affiliated with about sixty banking organizations. Although they account for only a third of
all SBICs, they represent more than 60 percent of
SBIC investments, about $5.25 billion out of a total
of $8.75 billion. All SBICs—bank-related and
others—account for about 7 percent of the venture
capital market and about 2 percent of the total private
equity market.
The large banking organizations active in private
equity investments have considerable experience and
diversified portfolios. They have, by and large, been
successful—with some reporting annual rates of
return in excess of 25 percent to 35 percent in recent
years. For the most part, they also have been conservative in recognizing gains on their investments,
discounting market valuations on traded equities to
reflect liquidation realities and often recognizing
increases in value on nontraded equities only by
actual sales or other events. No large aggregate losses
have been reported on the equity holdings of these
banking organizations in recent years. Of course, the
past several years have also seen the longest economic expansion and largest and longest bull market
in our history. Even in such an environment, however, the unusual returns have been dominated by a
small number of great successes, the so-called home
runs of the private equity business.
The attraction of banking organizations to the high
returns and the growing buoyancy in stock prices—
especially for IPOs (initial public offerings)—has
matched the growth in the entire private equity market. More private equity financing, especially venture
capital financing, was accomplished in the past three
years than in the previous thirty. In the fourth quarter
of last year and the first quarter of 2000, almost as
much venture capital was invested as in total over the
previous four quarters ending in September.
Risk and Equity Holdings
Even with rising valuations, private equity is still the
most expensive form of finance available. Investors
in private equity securities demand high expected
returns, ranging from 15 percent to 25 percent for
mature firms seeking expansion capital to 60 percent
to 80 percent for early stage ventures. The high
hurdle rates for venture capital finance reflect the fact
that the loss rates on individual deals are so high. A
review of venture capital investments over the past
four decades suggests that a fourth to a third of the
deals resulted in absolute losses, which is why we do
not see 60 percent to 80 percent returns on venture
capital portfolios. The high risks that such loss rates
imply are both the cause of the high issuer cost and
the flip side of high average returns on a portfolio of
venture capital equities. In both cases they represent
risk compensation.
High returns on aggregate venture capital investments rely on those "home runs" I referred to earlier
to offset the "strikeouts," if I may use an analogy.
Generally, about 20 percent of investments have been
Statements to the Congress
"home runs" with extraordinary returns that offset
the losses and mediocre returns of other investments.
Evidence from 1,000 private equity partnerships
developed by the firm Venture Economics suggests
that over the entire period since 1969, investors
received an average return of about a 20 percent
annual rate but that these returns were boosted by the
explosive IPO market in the late 1990s, facilitating
exit from a record number of investments by the
partnerships. As with individual investments, "home
runs" offset a substantial portion of "strikeouts."
Median returns have averaged closer to 10 percent,
and roughly one-fifth of the individual venture capital
partnerships have resulted in capital losses.
Returns to such partnerships have varied widely
over the years. Investors in more than 200 venture
capital partnerships formed in the early 1980s, when
the market was expanding rapidly, have received
only about a 5 percent to 8 percent annual return on
these investments. Nearly a quarter of these partnerships resulted in losses to investors. In a survey,
large long-term institutional private equity investors
reported that they generally expect a long-run rate
of return on private equities of at least 15 percent,
as compared with 11 percent to 12 percent for public
equities, but some report that they expect the standard
deviation of returns to be about twice as high—
32 percent versus 16 percent. A "standard deviation"
is a common statistical measure of variation, and
measures of variation are used by economists as
indicators of the degree of risk in an investment.
Any return (or losses) that banking organizations
capture per dollar of portfolio equities held are multiplied significantly relative to their own investment
in this part of their business—both absolutely and
relative to independent firms. That is, of course, the
result of the higher degree of leverage at banking
organizations. Independent venture capital operations
are generally unable to leverage their holdings to any
significant degree.
Banking Organization Capital and
Risk Absorption
As in all businesses, the primary role of the capital of
an organization is to absorb risk, that is, loss. Without
equity capital, businesses would not be able to borrow funds to finance any assets, let alone risky assets,
because losses would then fall on the creditors who
do not participate in the successes—the profits—of
the firm. Insured depository institutions and bank
holding companies, however, are required to hold as
573
little as 4 cents of equity for every dollar of risk
assets, although the average amount of equity actually held by all banks is about 9Vi percent of risk
assets. The largest U.S. banks and bank holding companies have an equity to risk asset ratio (tier 1 ratio)
of 7 percent to 9 percent. If assets contract in value
by these amounts, the entity is insolvent; indeed,
the Congress requires the agencies to begin steps
to close a bank when it becomes "critically undercapitalized," as defined by the Congress, which is
when the tangible equity capital to total asset ratio
of the bank falls to 2 percent.
A dollar contraction in asset values produces a
dollar contraction in equity capital. Clearly, banking
organizations have very little tolerance for risk—that
is, loss—because they hold such modest equity. Small
declines in asset values would eliminate large proportions of their small equity base.
The risk of equity investments with modest equity
capital backing is even greater when one considers
that, under generally accepted accounting principles,
a firm engaged in equity investment is permitted to
count as income a substantial portion of the increase
in the value of its equity investments, even if the firm
has not realized this profit by selling the securities.
This increase in value—even though unrealized and
subject to decline—is then permitted to count as
capital for the firm and can be used to support growth
of the firm. In effect, under our current capital rules, a
banking organization could leverage these paper
gains twenty-five times.
From an economic point of view, banks have been
able to operate with a high degree of leverage because
their creditors, depositors and others are comforted
by the safety net—government guarantees of certain
deposit liabilities and access to the discount window
and payments and settlement systems—as well as
by supervision and regulation, which is intended to
ensure the safe and sound operation of the bank. In
the late 1980s and early 1990s, a large number of
banks did in fact become insolvent because of credit
losses, but historically a level of leverage that would
be unacceptable in most other financial businesses
has proved to be viable for banking organizations
with traditional banking assets.
Risk and Capital
Commenters do not generally disagree with the
observation that venture capital equity assets are
riskier than the average banking organization asset.
Nor have they generally disagreed with one of the
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Federal Reserve Bulletin • August 2000
very few, apparently immutable, laws of finance that,
in the long run, the higher the nominal rate of return
the greater the inherent risk of the asset. By greater
risk, I mean the greater the variability of returns, and
thus the larger probability of loss, for a portfolio of
such assets. The thrust of the evidence the Board
reviewed in developing its capital proposal, which I
have described above, suggested that private equity
investments carry risks that greatly exceed those of
average banking organization assets. Moreover, the
Board was concerned that the level of this higher
risk has become increasingly inconsistent with the
minimum requirements of the current Basel Capital
Accord, particularly as the amount of such investments has risen sharply in an environment of substantially rising equity valuations. Our review of the
merchant banking authority brought this general issue
to the fore for equity assets purchased under all
authorities, not just the new merchant banking
authority.
As part of our review, supervisors and economists
from both the Federal Reserve and the Treasury, with
whom we share rulemaking authority on merchant
banking, met with banking organizations and securities firms active in the private equity business to
review best practices. These interviews indicated that
both sets of firms allocated very high levels of internal or economic capital to their private equity
business—between 25 and 100 percent, with the
median above 50 percent. That is to say, the practitioners' own experience and the resultant policy
they followed internally was to assume that the risks
were such that they should presume they might lose
all or a significant share of their investment and
should prepare for that eventuality. That practice
seemed consistent with the evidence we reviewed,
particularly given the current valuations placed on
equities relative to historical norms.
That practice was also consistent with the
experience of those firms that provide the dominant
volume of the private equity market investment. At
least 75 percent of the private equity funding is
provided by independent firms that manage limited
partnerships, raising funds from pension funds,
endowments, foundations, corporations, and wealthy
individuals. Their equity holdings are essentially
balanced dollar-for-dollar with the owner-investor's
own equity investment, with virtually no debt
financing.
We also looked at the practice of other government
agencies. The Small Business Administration limits
the subsidized borrowing of nonbank SBICs from it
to three times equity. In addition, the Securities and
Exchange Commission's net capital rule for securi
ties broker-dealers generally requires the firm to
deduct from its regulatory capital 100 percent of the
carrying value of the firm's private equity investments, a rule that induces these firms to shift their
holdings to nonregulated affiliates.
In view of their similarity, the Board did not distinguish in its proposal the risk of a venture capital
investment made under the new merchant banking
authority from that made under other authorities. By
and large, the nature of most major banking organizations' existing equity investments are similar to
those made by nonbank venture capitalists and are
similar to those likely to be made under merchant
banking powers. The high average returns to these
investments—by suggesting their riskiness (recall
the iron law that high return means high risk)—also
suggested that we seek comment on the need for a
higher commitment of equity capital for all portfolio
equity assets at banking organizations.
Consequently, we proposed a 50 percent capital
requirement on portfolio equity investments held
under any authority at any location in a bank holding
company. This proposal is subject to review in light
of public comments.
Comments about the Capital Proposal
Indeed, as mentioned at the outset, the Board is now
reviewing and evaluating the comments on its proposals. My colleagues and I have not seen all of
the comments or heard the staff's evaluation of them.
We are not committed to any conclusion or decision
at this time. Nonetheless, the objectives of the subcommittee, as I understand them, would not be met if
I did not try to highlight the major issues as they
seem to be unfolding. Please keep in mind the caveats I just noted as I try to do so.
Rating Agencies
Each of the two major rating agencies—Standard &
Poor's and Moody's—has issued reports discussing
banking organizations' private equity activities since
the Board published its capital proposal. Standard &
Poor's concluded that the proposed 50 percent
equity support appeared to be about right "if the
bank's portfolio is mature and diversified; less diversified portfolios could need up to 100 percent." It
also noted that the heavy regulatory claim on capital
for banking organizations active in private equity
markets would have "no rating implications"
"because Standard & Poor's ha[s] historically alio-
Statements to the Congress
cated this level of capital" to the equity investment
activities of banking organizations.
Moody's noted that venture capital activities are
"capital-intensive" and that it believed "that it is
prudent for venture capital activities to be funded
with a high equity component. . . . If the bank is
taking on significant fixed income obligations to fund
an equity investment, we have further concerns." It
concluded that "Moody's sees the recent Treasury
and Fed proposal requiring U.S. banks to set aside
capital equal to 50 percent of a bank's venture capital
investments . . . as being supportive of bank ratings."
Economic vs. Regulatory Capital
In reviewing the capital proposal, the Board will have
to consider a critical comment raised regarding the
distinction between regulatory and economic capital.
All parties generally agree, as I have noted, that private equity is a risky asset. There is, as I also noted,
substantial evidence that, in general, both the firms
engaged in private equity investing and the rating
agencies internally or analytically allocate at least as
much capital to such assets as the Board has proposed. That is, the economic capital applied to these
assets for internal risk and other purposes already
exceeds the regulatory capital by a wide margin, a
margin that is not exceeded by our proposal.
However, commenters have argued that there
would be considerably less difficulty with the proposed regulatory capital treatment for equities if the
authorities permitted a regulatory capital treatment
for the rest of a banking organization's assets that
was consistent with the "real" or economic risk on
those assets. This argument rests on the assumption
that the regulatory capital on a significant volume of
banking organization assets exceeds their economic
charge and that, therefore, the sum of a higher regulatory capital on equities and the existing regulatory
capital on all other assets would exceed the total
economic capital on all the assets. The commenters
that have raised this issue have argued that the Federal Reserve has engaged in "cherry picking"—
picking out the risky assets for higher capital charge
without providing relief for the lower-risk assets.
They have urged the Board to wait until there is
broader reform in the Basel Accord that would presumably address these concerns. The reforms under
way in the accord are, in fact, seeking to make bank
regulatory capital charges more risk-sensitive and
consistent with the "true" underlying economic risk
at individual institutions. The U.S. banking agencies
575
are aggressively promoting these efforts in discussions with other G-10 countries at Basel.
I remind you again that the Board has not discussed this particular comment yet, although similar
issues have been raised in other discussions of capital
more broadly. It may be better, as some commenters
suggest, to deal with all the capital issues at one time.
However, we face a practical problem. Private equity
holdings are large and growing rapidly now, and the
restraints on further growth are being relaxed. Meanwhile, practical reform of the Basel Accord is at least
three years in the future.
As the subcommittee knows, policymaking
requires tradeoffs, and we are going to have to balance the facts and considerations I have just noted.
In doing so, however, we must also consider another
variable in our deliberations, namely the undermining
of the regulatory capital structure through so-called
capital arbitrage.
Essentially, the regulatory capital framework now
groups or "buckets" all banking assets into four risk
categories for determining their capital charge—with
most falling in the full-weight category that gets the
4 percent minimum tier 1 charge mentioned earlier.
Banking organizations in recent years, however, have
developed methods to move off their balance sheets
those assets whose economic risk—as determined by
the market—implies an economic capital charge that
is less than the regulatory capital requirement. That
is, they have avoided a one-size-fits-all average regulatory capital requirement whenever that charge is
above the market's risk evaluation on a specific set of
assets, retaining those assets whose economic capital
is equal to or higher than the regulatory requirement.
The Federal Reserve and the other banking agencies have not sought to block these transactions.
Rather we have all recognized the market reality that
the current regulatory capital requirements imply
that banking organizations have two choices. The
first is to simply stop extending certain low-risk
credit because the regulatory capital requirement is
too high. The second choice is to extend such credits
coupled with market transactions that, by equilibrating the amount of capital required with that consistent with the real economic risk, permit the credit
extension to be both safe and profitable. We have, in
short, permitted capital arbitrage whenever the banking organization can meet the market test.
Capital arbitrage means, however, that the resultant
regulatory capital ratios for some banking organizations are biased upward. That is, the average retained
assets are, on average, more risky, and thus the same
capital ratio as before does not represent the same
degree of capital strength. Put differently, banking
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Federal Reserve Bulletin • August 2000
organizations engaging in capital arbitrage have
already removed from their balance sheets a large
number of those assets whose economic capital
charge is less than their regulatory capital requirement. These banking organizations, that is to say,
have already engaged in a form of cherry picking to
lower their capital charges and thus have fewer lowrisk on-balance-sheet assets subject to full capital
charge. It is difficult to estimate the capital "savings"
made by these institutions from capital arbitrage and
compare it to the potential "cost" of higher regulatory capital on equities. The measured value of the
latter may exceed the former. Nonetheless, capital
arbitrage is surely one of the variables we will consider in the final decisionmaking process.
A related issue in interpreting distinctions between
economic and regulatory capital is banking organizations' desire for excess regulatory capital. It appears
clear that banking organizations want to hold a level
of capital above the regulatory minimums, in part
to ensure that they can retain the imprimatur of
being classified as "well-capitalized" in the event
of losses, and in part to receive higher ratings from
the rating agencies and a lower cost of funds from
the market. Thus, commenters were not assuaged
by the observation that even after the imposition
of the proposed capital charge on equities, all the
banking organizations with significant equity holdings that are now "well-capitalized" on a regulatory basis would remain so, and would have the
ability to acquire additional equities and still remain
"well-capitalized." Their focus and concern is the
reduction in the margin by which they would be
"well-capitalized."
Congressional Intent
Several commenters have argued that the Board's
proposals are inconsistent with several stated congressional objectives: (1) facilitating small business
venture capital equity finance, especially through
SBICs; (2) permitting securities firms to become
financial holding companies (the "two-way street");
and (3) the desire to avoid imposing bank-like regulation on the nonbanking activities of financial holding
companies ("Fed-lite").
As noted earlier, the Small Business Investment
Act and the Bank Holding Company Act permit
banks and bank holding companies to invest in and
operate SBICs with the special objective of easing
access to venture capital by smaller firms. Some
commenters have argued that higher capital requirements may blunt this effort. The Board must evaluate
the potential impact of its capital proposal on the
financing of small businesses through SBICs. An
important question is whether a higher regulatory
capital charge would, in fact, significantly reduce
the commitment of banking organizations to SBIC
finance. Banks tell us they already have an internal
capital hurdle at least as high as the proposed regulatory charge, and in applying the charge we understand they make no distinction about the authority
under which, or where in the organization, the
shares are held. Moreover, a reduction in their
investments—if it did occur—might not be a significant factor in total venture capital finance for small
businesses because banking organization-related
SBICs account for only about 6 percent of all venture
capital finance. Nonetheless, the comments require
that we review the SBIC issue again.
Any observer of the negotiations leading to enactment of the GLB Act is aware of the importance
placed on both the "two-way street" and "Fed lite."
Some commenters argued that the proposed capital
charge will make it difficult for securities firms to
become financial holding companies by requiring
that, as soon as they acquire a bank, they meet higher
regulatory capital requirements on the equity investments already held by the firm. In developing the
proposal, however, we tried to carefully evaluate this
issue, including whether the internal capital charges
securities firms told our staff they used represent a
calculation of the risks associated with equity investment activities or are just used for internal management decisionmaking purposes but not for risk management. We will review this issue again in light of
the comments.
An area in which commenters have suggested that
we may not have been consistent with our commitment to "Fed-lite" is the quantitative limit or cap on
aggregate holdings of equities by banking organizations. Our thinking, admittedly similar to our historical stance, is to be cautious in new activities
until we have become more comfortable with how
banking organizations manage their positions. We
followed such an approach with section 20 affiliates.
Recall that merchant banking activities have been
authorized to begin while the capital rule is simply
proposed. Thus, financial holding companies—twothirds of which are below $1 billion in consolidated
assets—could begin to acquire potentially large
amounts of risky assets before being required to hold
an appropriate amount of additional capital to support
these investments. Moreover, we chose a cap that we
felt was unlikely to bind on any present participant
any time soon and that, in any event, we could relieve
on a case-by-case basis if appropriate. Our objective
Statements to the Congress
577
in the proposal was to err on the side of caution,
particularly for new participants, and to consider
eliminating the cap in connection with the development of a final capital rule.
The commenters raised important questions, and
the Board will carefully evaluate them and modify its
proposal and interim rule where necessary and in the
public interest.
Statement by Patrick M. Parkinson, Associate Director, Division of Research and Statistics, Board of
Governors of the Federal Reserve System, before the
Subcommittee on Risk Management, Research, and
Specialty Crops of the Committee on Agriculture, U.S.
House of Representatives, June 14, 2000
ing professional counterparties, the PWG concluded
that regulation was unnecessary for these purposes
because financial derivatives generally are not readily
susceptible to manipulation and because professional
counterparties can protect themselves against fraud
and unfair practices. Consequently, the PWG recommended that financial OTC derivatives transactions
between professional counterparties be excluded
from coverage of the CEA. Furthermore, it recommended that these transactions between professional
counterparties be excluded even if they are executed
through electronic trading systems. Finally, the PWG
recommended that transactions that were otherwise
excluded from the CEA should not fall within the
ambit of the act simply because they are cleared. The
PWG concluded that clearing should be subject to
government oversight but that such oversight need
not be provided by the CFTC. Instead, for many
types of derivatives, oversight could be provided by
the Securities and Exchange Commission (SEC), the
Office of the Comptroller of the Currency (OCC), the
Federal Reserve, or a foreign financial regulator that
the appropriate U.S. regulator determines to have
satisfied its standards.
The provisions of H.R. 4541 that address OTC
derivatives are generally consistent with the PWG's
conclusions and recommendations. However, the
Board is troubled by a provision that might leave
uncertainty about whether some electronic trading
systems for financial contracts between professional
counterparties were subject to the CEA. Specifically,
restricting exclusions for transactions conducted on
electronic trading facilities to "bona fide" principalto-principal transactions is unnecessary and undesirable. This restriction could be construed to preclude
a counterparty from entering into "back-to-back"
principal-to-principal transactions, that is, from using
an excluded electronic trading system to hedge transactions executed outside the trading system. We can
identify no public policy reason for precluding such
back-to-back transactions. Doing so would discourage the use of electronic trading systems and thereby
inhibit realization of the improvements in market
efficiency and transparency that such systems promise to deliver.
In addition, H.R. 4541 does not require government oversight of clearing organizations for OTC
derivatives, contrary to the recommendation of the
I am pleased to be here to present the Federal Reserve
Board's views on legislation to modernize the Commodity Exchange Act (CEA). The Board continues
to believe that such legislation is essential. To be
sure, the Commodity Futures Trading Commission
(CFTC) has recently proposed issuing regulatory
exemptions that would reduce legal uncertainty about
the enforceability of over-the-counter (OTC) derivatives transactions and would conform the regulation
of futures exchanges to the realities of today's marketplace. These administrative actions by no means
obviate the need for legislation, however. The greatest legal uncertainty affecting OTC derivatives is in
the area of securities-based transactions, to which the
CFTC's exemptive authority does not extend. Furthermore, as events during the past few years have
clearly demonstrated, regulatory exemptions carry
the risk of amendment by future commissions. If our
derivatives markets are to remain innovative and
competitive internationally, they need the legal and
regulatory certainty that only legislation can provide.
The Board commends this committee for introducing comprehensive legislation (H.R. 4541) that
addresses these critical issues. In my remarks today
I shall focus on the three principal areas that the
legislation covers: (1) OTC derivatives; (2) regulatory relief for U.S. futures exchanges; and (3) repeal
of the Shad-Johnson restrictions on the trading of
single-stock futures.
OTC
DERIVATIVES
In its November 1999 report, Over-the-Counter
Derivatives and the Commodity Exchange Act, the
President's Working Group on Financial Markets
(PWG) concluded that OTC derivatives transactions
should be subject to the CEA only if necessary to
achieve the public policy objectives of the act—
deterring market manipulation and protecting investors against fraud and other unfair practices. In the
case of financial derivatives transactions involv
578
Federal Reserve Bulletin • August 2000
PWG. The Board continues to believe that such oversight is appropriate and that alternatives to CFTC
oversight should be provided. In this regard, the
Board recommends incorporating into legislation the
provisions of H.R. 1161 (the bill that House Banking
Committee Chairman James A. Leach introduced in
April), which would enhance the Federal Reserve's
authority to oversee clearing organizations that
choose to be regulated as uninsured state member
banks and would clarify the treatment of bank clearing organizations (including those overseen by the
OCC) in bankruptcy.
REGULATORY
EXCHANGES
RELIEF FOR U.S. FUTURES
The PWG did not make specific recommendations
about the regulation of traditional exchange-traded
futures markets that use open outcry trading or that
allow trading by retail investors. Nevertheless, it
called for the CFTC to review the existing regulatory
structures, particularly those applicable to financial
futures, to ensure that they remain appropriate in
light of the objectives of the CEA. In February, the
CFTC published a report by a staff task force that
provided a comprehensive review of its regulatory
framework and proposed sweeping changes to the
existing regulatory structure. We understand that the
regulatory relief provisions of H.R. 4145 are intended
to codify these proposals.
Using the same approach as the PWG, the CFTC
has evaluated the regulation of futures exchanges in
light of the public policy objectives of deterring
market manipulation and protecting investors. When
contracts are not readily susceptible to manipulation
and access to the exchange is limited to sophisticated
counterparties, the CFTC has proposed alternative
regulatory structures that would eliminate unnecessary regulatory burden and allow domestic exchanges
to compete more effectively with exchanges abroad
and with the OTC markets. More generally, the CFTC
proposes to transform itself from a frontline regulator, promulgating relatively rigid rules for exchanges,
to an oversight agency, assessing exchanges' compliance with more flexible core principles of regulation.
The Board supports the general approach to regulation that was outlined in the CFTC's proposals. For
some time the Board has been arguing that the regulatory framework for futures trading, which was
designed for the trading of grain futures by the
general public, is not appropriate for the trading of
financial futures by large institutions. The CFTC's
proposals recognize that the current "one-size-fitsall" approach to regulation of futures exchanges is
inappropriate, and they generally incorporate sound
judgments regarding the degree of regulation needed
to achieve the CEA's purposes.
Furthermore, the Board generally supports codification of the CFTC's proposals so as to provide the
exchanges with greater certainty regarding future
regulation. However, the Treasury Department is concerned that the exempt board of trade provisions
might have unintended consequences that could
reduce the effectiveness of the existing regulatory
framework for the trading of government securities.
It may be prudent, therefore, to limit the codification
of the exempt board of trade provisions, at least so
that markets currently regulated under the Government Securities Act of 1986 are not affected. This
would allow the CFTC to address any unintended
consequences for the regulation of government securities by changing the terms of its exemptions.
SINGLE-STOCK
FUTURES
The PWG concluded that the current prohibition
on single-stock futures (part of the Shad-Johnson
Accord) can be repealed if issues about the integrity
of the underlying securities markets and regulatory
arbitrage are resolved. The Board believes that these
issues can, and should, be resolved through negotiations between the CFTC and the SEC. The Congress
should continue to urge the two agencies to settle
their remaining differences so that investors have the
opportunity to trade single-stock futures, both on
futures exchanges and on securities exchanges.
If it would facilitate repeal of the prohibition, the
Board is willing to accept regulatory authority over
levels of margin on single-stock futures, as provided
in H.R. 4541, so long as the Board can delegate that
authority to the CFTC, the SEC, or an Intermarket
Margin Board consisting of representatives of the
three agencies. The Board understands that the purpose of such authority would be to preserve the
financial integrity of the contract market and thereby
prevent systemic risk and to ensure that levels of
margins on single-stock futures and options are consistent. The Board would note that, for purposes of
preserving financial integrity and preventing systemic risk, margin levels on futures and options
should be considered consistent, even if they are not
identical, if they provide similar levels of protection
against defaults by counterparties, taking into account
any differences in (1) the price volatility of the con-
Statements to the Congress
tracts, (2) the frequency with which margin calls are
made, or (3) the period of time within which margin
calls must be met.
CONCLUSION
579
Act is essential. The Board appreciates this committee's efforts to foster the consensus necessary to enact
legislation. Although some difficult issues remain
unresolved, H.R. 4541 represents significant progress
toward that goal.
In conclusion, the Board continues to believe that
legislation modernizing the Commodity Exchange
Statement by Alan Greenspan, Chairman, Board of
Governors of the Federal Reserve System, before the
Committee on Agriculture, Nutrition, and Forestry
and the Committee on Banking, Housing, and Urban
Affairs, U. S. Senate, June 21, 2000
I am pleased to be here to present the Federal Reserve
Board's views on the Commodity Futures Modernization Act of 2000 (S. 2697). My testimony today
will be largely identical to testimony that my colleague Patrick Parkinson delivered on behalf of the
Board last week to the House Subcommittee on Risk
Management, Research, and Specialty Crops.1 The
Board continues to believe that such legislation
modernizing the Commodity Exchange Act (CEA) is
essential. To be sure, the Commodity Futures Trading
Commission (CFTC) has recently proposed issuing
regulatory exemptions that would reduce legal uncertainty about the enforceability of over-the-counter
(OTC) derivatives transactions and would conform
the regulation of futures exchanges to the realities of
today's marketplace. These administrative actions by
no means obviate the need for legislation, however.
The greatest legal uncertainty affecting OTC derivatives is in the area of securities-based transactions,
to which the CFTC's exemptive authority does not
extend. Furthermore, as events during the past few
years have clearly demonstrated, regulatory exemptions carry the risk of amendment by future commissions. If our derivatives markets are to remain
innovative and competitive internationally, they need
the legal and regulatory certainty that only legislation
can provide.
In my remarks today I shall focus on three of the
areas that the legislation covers: (1) OTC derivatives;
(2) regulatory relief for U.S. futures exchanges; and
(3) repeal of the Shad-Johnson restrictions on the
trading of single-stock futures.
1. See "Statement by Patrick M. Parkinson, Associate Director,
Division of Research and Statistics, Board of Governors of the Federal Reserve System, before the Subcommittee on Risk Management,
Research, and Specialty Crops, Committee on Agriculture, U.S. House
of Representatives, June 14, 2000," pp. 577-579 in this issue.
OTC
DERIVATIVES
In its November 1999 report, Over-the-Counter
Derivatives and the Commodity Exchange Act, the
President's Working Group on Financial Markets
(PWG) concluded that OTC derivatives transactions
should be subject to the CEA only if necessary to
achieve the public policy objectives of the act—
deterring market manipulation and protecting investors against fraud and other unfair practices. In the
case of financial derivatives transactions involving professional counterparties, the PWG concluded
that regulation was unnecessary for these purposes
because financial derivatives generally are not readily
susceptible to manipulation and because professional
counterparties can protect themselves against fraud
and unfair practices. Consequently, the PWG recommended that financial OTC derivatives transactions
between professional counterparties be excluded
from coverage of the CEA. Furthermore, it recommended that these transactions between professional
counterparties be excluded even if they are executed
through electronic trading systems. Finally, the PWG
recommended that transactions that were otherwise
excluded from the CEA should not fall within the
ambit of the act simply because they are cleared. The
PWG concluded that clearing should be subject to
government oversight but that such oversight need
not be provided by the CFTC. Instead, for many
types of derivatives, oversight could be provided by
the Securities and Exchange Commission (SEC), the
Office of the Comptroller of the Currency, the Federal Reserve, or a foreign financial regulator that the
appropriate U.S. regulator determines to have satisfied its standards.
The provisions of S. 2697 that address OTC derivatives are generally consistent with the PWG's conclusions and recommendations. The Federal Reserve
Board is troubled, however, by a provision that might
leave uncertainty about whether some electronic
trading systems for financial contracts between professional counterparties were subject to the CEA.
Specifically, restricting exclusions for transactions
conducted on electronic trading facilities to "bona
580
Federal Reserve Bulletin • August 2000
fide" principal-to-principal transactions is unnecessary and undesirable. This restriction could be construed to preclude a counterparty from entering into
"back-to-back" principal-to-principal transactions,
that is, from using an excluded electronic trading
system to hedge transactions executed outside the
trading system. We can identify no public policy
reason for precluding such back-to-back transactions.
Doing so would discourage the use of electronic
trading systems and thereby inhibit realization of the
improvements in market efficiency and transparency
that such systems promise to deliver.
REGULATORY
EXCHANGES
RELIEF FOR U.S. FUTURES
The PWG did not make specific recommendations
about the regulation of traditional exchange-traded
futures markets that use open outcry trading or that
allow trading by retail investors. Nevertheless, it
called for the CFTC to review the existing regulatory
structures, particularly those applicable to financial
futures, to ensure that they remain appropriate in
light of the objectives of the CEA. In February, the
CFTC published a report by a staff task force that
provided a comprehensive review of its regulatory
framework and proposed sweeping changes to the
existing regulatory structure. We understand that the
regulatory relief provisions of S. 2697 are intended to
codify these proposals.
Using the same approach as the PWG, the CFTC
has evaluated the regulation of futures exchanges in
light of the public policy objectives of deterring
market manipulation and protecting investors. When
contracts are not readily susceptible to manipulation
and access to the exchange is limited to sophisticated
counterparties, the CFTC has proposed alternative
regulatory structures that would eliminate unnecessary regulatory burden and allow domestic exchanges
to compete more effectively with exchanges abroad
and with the OTC markets. More generally, the CFTC
proposes to transform itself from a frontline regulator, promulgating relatively rigid rules for exchanges,
to an oversight agency, assessing exchanges' compliance with more flexible core principles of regulation.
The Federal Reserve Board supports the general
approach to regulation that was outlined in the
CFTC's proposals. For some time the Board has been
arguing that the regulatory framework for futures
trading, which was designed for the trading of grain
futures by the general public, is not appropriate for
the trading of financial futures by large institutions.
The CFTC's proposals recognize that the current
"one-size-fits-all" approach to regulation of futures
exchanges is inappropriate, and they generally incorporate sound judgments regarding the degree of regulation needed to achieve the CEA's purposes.
Furthermore, the Board generally supports codification of the CFTC's proposals so as to provide the
exchanges with greater certainty regarding future
regulation. However, the Treasury Department is concerned that the exempt board of trade provisions
might have unintended consequences that could
reduce the effectiveness of the existing regulatory
framework for the trading of government securities.
To facilitate expeditious passage of legislation, it thus
may be prudent to limit the codification of the exempt
board of trade provisions, at least so that markets
currently regulated under the Government Securities
Act of 1986 are not affected. In such a scenario, the
CFTC could address any unintended consequences
for the regulation of government securities by changing the terms of its exemptions.
SINGLE-STOCK
FUTURES
The PWG concluded that the current prohibition
on single-stock futures (part of the Shad-Johnson
Accord) can be repealed if issues about the integrity
of the underlying securities markets and regulatory
arbitrage are resolved. The Board believes that
S. 2697 provides an appropriate framework for
resolving these issues. Such instruments should be
allowed to trade on futures exchanges or on securities exchanges, with primary regulatory authority
assigned to the CFTC or the SEC respectively. However, the bill recognizes that the SEC should have
authority over some aspects of trading of these products on futures exchanges. The scope of the SEC's
authority can, and should, be resolved through negotiations between the CFTC and the SEC. The Congress should continue to urge the two agencies to
settle their remaining differences so that investors
have the opportunity to trade single-stock futures.
If it would facilitate repeal of the prohibition,
the Federal Reserve Board is willing to accept regulatory authority over levels of margin on single-stock
futures, as provided in S. 2697, so long as the Board
can delegate that authority to the CFTC, the SEC, or
an Intermarket Margin Board consisting of representatives of the three agencies. The Board understands
that the purpose of such authority would be to preserve the financial integrity of the contract market
and thereby prevent systemic risk and to ensure that
levels of margins on single-stock futures and options
are consistent. The Board would note that, for pur-
Statements to the Congress
poses of preserving financial integrity and preventing
systemic risk, margin levels on futures and options
should be considered consistent, even if they are not
identical, if they provide similar levels of protection
against defaults by counterparties, taking into account
any differences in (1) the price volatility of the contracts, (2) the frequency with which margin calls are
made, or (3) the period of time within which margin
calls must be met.
CONCLUSION
This bill reflects a remarkable consensus on the need
for legal certainty for OTC derivatives and regulatory
581
relief for U.S. futures exchanges, issues that have
long eluded resolution. These provisions are vitally
important to the soundness and competitiveness of
our derivatives markets in what is an increasingly
integrated and intensely competitive global economy.
The Federal Reserve Board trusts that remaining
differences regarding single-stock futures and the
potential application of the securities laws to OTC
derivatives can be resolved quickly and that this
important piece of legislation can be expedited
through this Congress.
•
582
Announcements
FEDERAL OPEN MARKET
DIRECTIVE
COMMITTEE
The Federal Open Market Committee at its meeting
on June 28, 2000, decided to maintain the existing
stance of monetary policy, keeping its target for the
federal funds rate at 6V2 percent.
Recent data suggest that the expansion of aggregate demand may be moderating toward a pace closer
to the rate of growth of the economy's potential to
produce. Although core measures of prices are rising
slightly faster than a year ago, continuing rapid
advances in productivity have been containing costs
and holding down underlying price pressures.
Nonetheless, signs that growth in demand is moving to a sustainable pace are still tentative and preliminary, and the utilization of the pool of available
workers remains at an unusually high level.
In these circumstances, and against the background
of its long-term goals of price stability and sustainable economic growth and of the information currently available, the Committee believes the risks
continue to be weighted mainly toward conditions
that may generate heightened inflation pressures in
the foreseeable future.
CHAIRMAN ALAN GREENSPAN SWORN IN FOR
FOURTH FOUR-YEAR TERM
Alan Greenspan took the oath of office on June 20,
2000, as Chairman of the Board of Governors of the
Federal Reserve System for a fourth four-year term.
On January 4, 2000, President Clinton announced the
renomination of Dr. Greenspan as Board Chairman.
The appointment was confirmed by the Senate on
February 3, 2000, and the oath of office was administered in Dr. Greenspan's office by Vice Chairman
Roger W. Ferguson, Jr. Dr. Greenspan originally took
office on August 11, 1987. The text of President
Clinton's January 2000 announcement follows:
THE PRESIDENT:—You're supposed to stand over
here today. This is the only time I'm interfering with the
independence of the Fed. (Laughter.) You have to come
over here.
Good morning. Ladies and gentlemen, the United States
is enjoying an extraordinary amount of economic success,
for which we are all grateful. It seems clear that it is the
result of a convergence of a number of forces: a great
entrepreneurial spirit; stunning technological innovations;
well-managed businesses; hardworking and productive
men and women in our work force; expanding markets for
our goods and services; a complete commitment to fiscal
discipline; and of course, a Federal Reserve that has made
independent, professional, and provably wise judgments
about our monetary policy.
Since I took office seven years ago, one of the hallmarks
of our economic strategy has been a respect for the independence and the integrity of the Federal Reserve. I have
always believed the best way for the Executive Branch to
work with the Fed is to let the Chairman and the members
do their jobs independently, while we do our job—to
promote fiscal discipline, to open markets, to invest in
people and technologies.
That has given us strong economic growth with low
inflation and low unemployment. Thanks to the hard work
of the American people, we now enjoy the longest peacetime expansion in our history. In February, it will become
the longest economic expansion ever. With productivity
high, inflation low and real wages rising, it is more than the
stock markets which have boomed. This has helped ordinary people all over America.
We have a 30-year low in unemployment, a 32-year low
in welfare, a 20-year low in poverty rates, the lowest
African-American and Hispanic unemployment rates ever
recorded, the lowest female unemployment rate in
4 0 years, the lowest single-parent household poverty in
46 years.
Clearly, wise leadership from the Fed has played a very
large role in our strong economy. That is why, today, I am
pleased to announce my decision to renominate Alan
Greenspan as Chairman of the Federal Reserve Board. For
the past 12 years, Chairman Greenspan has guided the
Federal Reserve with a rare combination of technical
expertise, sophisticated analysis, and old-fashioned common sense. His wise and steady leadership has inspired
confidence, not only here in America, but all around the
world.
I believe the productive, but appropriate relationship that
our administration has enjoyed with the Fed has helped
America play a critical and leading role in dealing with the
Asian financial crisis and many of the other things that we
have faced over the last seven years.
Chairman Greenspan's leadership has always been crucial to these successes. With his help, we were able, also,
last year to enact historic financial reform legislation,
repealing Glass-Steagall and modernizing our financial
systems for the 21st century. He was also, I think it's worth
noting, one of the very first in his profession to recognize
the power and impact of new technologies on the new
economy, how they changed all the rules and all the
possibilities. In fact, his devotion to new technologies has
been so significant, I've been thinking of taking Alan.com
public; then, we can pay the debt off even before 2015.
583
On a more serious note, let me say again—this Chairman's leadership has been good not just for the American
economy and the mavens of finance on Wall Street, it has
been good for ordinary Americans. Even though my staff
makes sure that I never give Chairman Greenspan advice,
they have not been able to stop me from asking him for his
advice. So I would also like to thank him for the many
conversations we've had over the last seven years in our
ongoing attempt to understand this amazing and everchanging economy.
Finally, I would like to thank him for his willingness to
serve another term. After these years of distinguished
public service and at a pinnacle of success, he could be
forgiven if he were willing to walk away to a more leisurely and, doubtless, more financially lucrative life. His
continued devotion to public service should be a cause of
celebration in this country and around the world, and it's
something for which I am very grateful.
Mr. Chairman?
CHAIRMAN GREENSPAN:—Mr. President, I first
wish to express my deep appreciation to you for the confidence that you've shown in me over the years. And I look
forward to Senate consideration.
The Federal Reserve has been a remarkable institution
with which to work, and, as I've indicated to you inside, I
must say I've enjoyed every minute of it. It's really been
an extraordinary challenge, and especially for an economist who likes to get into the nitty-gritty of every statistic
you've ever seen.
My colleagues and I have been very appreciative of your
support of the Fed over the years, and your commitment to
fiscal discipline, which, as you know, and indeed have
indicated, has been instrumental in achieving what in a few
weeks, as you pointed out, will be the longest economic
expansion in the nation's history.
Your economic policy staff has been exceptional, in my
view. I've especially enjoyed working with Lloyd Bentsen,
Bob Rubin, and now Larry Summers. These are all superb
human beings, as well as first-rate professionals. The same
goes for the rest of your economic advisors, Mr. President—Gene Sperling, and Martin Baily and his colleagues.
Again, Mr. President, thank you. I look forward to
working with you in the future. And I must say you have
been a good friend to America's central bank. Thank you,
sir.
THE PRESIDENT:—Thank you.
PROPOSED
ACTIONS
The Federal Reserve Board on June 23, 2000, published proposed revisions to the Regulation E (Electronic Fund Transfers) Official Staff Commentary,
which applies and interprets the requirements of the
regulation. Comments are due by August 31, 2000.
The proposed revisions provide guidance on electronic check conversion transactions that occur, for
example, when a check is scanned at point of sale
for information to initiate an electronic debit from a
consumer's account. Additional guidance is provided
on electronic authorizations permitting recurring debits from a consumer's account, as well as other issues.
The commentary is intended to help financial institutions comply with Regulation E when they offer
electronic fund transfer services to consumers.
ISSUANCE OF GUIDANCE ON
INVESTMENT AND MERCHANT
EQUITY
BANKING
The Federal Reserve Board on June 22, 2000, issued
examination guidance identifying sound practices for
equity investment and merchant banking.
The guidance, contained in a supervisory letter—
SR 00-09 (SPE)~sent to Federal Reserve bank
examiners and supervisors, as well as banking organizations supervised by the Federal Reserve, codifies
and supplements existing supervisory practices.
"While equity investments in non-financial companies can contribute substantially to earnings, such
investments, like other rapidly growing and highly
profitable business lines, can entail significant market, liquidity and other risks," wrote Richard Spillenkothen, director of the Board's Division of Banking
Supervision and Regulation.
"Sound investment and risk management practices
and strong capital positions are critical elements in
the prudent conduct of these activities," he wrote.
The guidance advises supervisors to encourage
banking institutions to make appropriate public disclosures relevant to their equity investments, including accounting techniques and valuation methods
used, realized and unrealized gains and losses, and
insights regarding the potential performance of
investments under alternative market conditions.
Merchant banking and equity investment have
emerged as an increasingly important source of earnings at some institutions, and the Gramm-LeachBliley Act enacted in November provides additional
merchant banking authority for financial holding
companies.
Supervisory letters are the Federal Reserve's primary means of communicating key policy directives to its examiners, supervisory staff, and the
banking industry. Supervisory letters can be viewed
on the Board's web site at www.federalreserve.gov/
boarddocs/srletters.
INTERAGENCY REQUEST FOR COMMENT ON
PROPOSED STANDARDS FOR CUSTOMER
INFORMATION
SECURITY
The Board of Governors of the Federal Reserve
System, the Federal Deposit Insurance Corporation,
the Office of the Comptroller of the Currency, and
the Office of Thrift Supervision jointly requested
584
Federal Reserve Bulletin • August 2000
on June 21, 2000, comment on a proposed rule
establishing standards for safeguarding confidential
customer information. The proposed rule would
implement section 501 (b) of the Gramm-LeachBliley Act (GLBA). Comments will be accepted until
August 25, 2000.
The law requires the agencies to establish standards for financial institutions relating to administrative, technical, and physical safeguards for customer records and information. These safeguards are
intended to ensure the security and confidentiality
of customer records and information, protect against
any anticipated threats or hazards to the security or
integrity of these records, and protect against unauthorized access to or use of these records or information that would result in substantial harm or inconvenience to a customer.
The proposed rule would provide that financial
institutions establish an information security program
that would require them to (1) identify and assess
the risks that may threaten customer information;
(2) develop a written plan containing policies and
procedures to manage and control these risks;
(3) implement and test the plan; and (4) adjust the
plan on a continuing basis to account for changes
in technology, the sensitivity of customer information, and internal or external threats to information
security.
The proposed rule outlines specific factors that
banks should consider in implementing a security
program. Among other factors, banks should evaluate
their controls on access to customer information and
their policies for encrypting customer information
while it is being transmitted or stored on networks to
which unauthorized persons may have access.
Financial institutions should test, on a regular
basis, key controls, systems, and procedures to confirm that they meet the objectives of their security
programs. The proposed guidelines suggest that tests
should be conducted by independent third parties or
by staff independent of those who develop or maintain the security program. The agencies seek comment on the need for specific types of tests, such as
penetration or intrusion detection tests.
The proposed rule also outlines responsibilities of
directors and management of financial institutions in
overseeing the protection of customer information.
An institution's board of directors should approve
written information on security policies and programs, and oversee management's efforts to develop,
implement, and maintain an effective information
security program. Management should evaluate the
effect of changing business arrangements, such as
mergers and joint ventures, document compliance
with the security standards, and report to the board on
the overall status of the program.
The agencies seek comments on various aspects of
the proposal, including its effect on community banks
that operate with more limited resources and that may
have a different risk profile than larger banks. Comments are also sought on whether the final standards
should be guidelines or regulations.
AGENCIES ISSUE REVISED
ACTIVITY REPORT FORM
SUSPICIOUS
The five federal financial institutions supervisory
agencies—the Board of Governors of the Federal
Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration,
the Office of the Comptroller of the Currency, and the
Office of Thrift Supervision, together with the Financial Crimes Enforcement Network (FinCEN)—issued
on June 19, 2000, a newly revised Suspicious Activity Report (SAR) form.
Beginning immediately, financial institutions and
organizations that are currently required to report
suspicious activity pursuant to the existing regulations of the federal financial institutions supervisory
agencies and FinCEN may use the new SAR form
to make these reports. Financial institutions and organizations may continue to use the existing SAR form
while their procedures and systems are updated to
make use of the new SAR form. However, no versions of the SAR form—other than the new SAR
form that is being issued—will be accepted after
December 31, 2000.
The revisions to the SAR form reflect comments
from filers and users on how to make the SAR form
easier to complete and to provide more useful and
timely information. Consistent with this goal, several
revisions have been made to the new SAR form being
issued. In addition to modifying the layout of the
SAR form for easier use, the agencies have made the
following changes:
• Added a check box for "Computer Intrusion" to
Part III, "Suspicious Activity Information," in recognition of the need to obtain more specific information
with regard to computer-related suspicious activity.
Along with the addition of the check box in Part III,
a specific definition of "Computer Intrusion" has
been added to the "When to Make a Report" instructions at number 2
• Deleted the two sections requiring witness and
preparer information and have replaced these sections with Part IV, "Contact for Assistance"
Announcements
• Replaced the requirements to provide the name
and address of any law-enforcement authorities contacted with regard to the suspicious activity being
reported with Part III, "Suspicious Activity Information," items 40 through 44, to include check boxes
for the law-enforcement agencies contacted and to
list the names and telephone numbers of lawenforcement personnel contacted
• Deleted the requirement to identify whether an
SAR is an "Initial Report," "Corrected Report," or
"Supplemental Report." Instead, filers will be
required only to identify when an SAR is being filed
to correct a prior SAR. Specific instructions on filing
an SAR to correct a prior report have been added
in the "How to Make a Report" instructions at number 3.
Along with the issuance of the new SAR form,
guidance for completing SAR forms has been prepared and is being distributed with the new SAR
form. The guidance provides valuable information on
the preparation and filing of SAR forms.
In addition to the new SAR form, new software
has been developed and is available to assist in the
preparation and filing of SAR forms. The new SAR
software and new SAR form are available on the
web sites of the federal financial institutions supervisory agencies and FinCEN. The web site addresses
are (1) the Board of Governors of the Federal Reserve
System: www.federalreserve.gov; (2) the Federal
Deposit Insurance Corporation: www.fdic.gov;
(3) the National Credit Union Administration:
www.ncua.gov; (4) the Office of the Comptroller of
the Currency: www.occ.treas.gov; (5) the Office of
Thrift Supervision: www.ots.treas.gov; and (6) FinCEN: www.treas.gov/fincen. Each of these web sites
will have available the new SAR form, the guidance
for the SAR form, and the new SAR software or
instructions on how to obtain these materials from
other web sites.
With the issuance of the new SAR form and SAR
software, financial institutions and organizations will
be able to file the new form with the following
procedures:
• Using the new SAR software to complete the
SAR form, saving it on a diskette, and mailing it to
the Detroit Computing Center, as set forth in the SAR
instructions
• Using the new SAR software to complete the
SAR form, printing a paper version of the completed
SAR form, and mailing it to the Detroit Computing
Center, as set forth in the SAR instructions
585
• Producing a magnetic tape of SAR forms (using
revised specifications obtained from the Detroit Computing Center) and mailing them to the Detroit Computing Center
• Completing (if none of the above options is
available) the paper version of the SAR and mailing
it to the Detroit Computing Center, as set forth in the
SAR instructions.
For any questions about the newly issued SAR
form, financial institutions and organizations should
contact their primary federal regulator or FinCEN.
ENFORCEMENT
ACTIONS
The Federal Reserve Board on June 23, 2000,
announced the issuance of an order of prohibition
against Lawrence Michaelessi, a former employee
and institution-affiliated party of the Rochester
Branch of The Bank of New York, New York,
New York.
Mr. Michaelessi, without admitting to any allegations, consented to the issuance of the order based on
his apparent unsafe and unsound practices and violations of law in connection with his embezzlement of
funds from The Bank of New York.
The Federal Reserve Board on June 23, 2000,
announced the execution of a written agreement by
and among Banco Bilbao Vizcaya Argentaria, S.A.,
Madrid, Spain; Banco Bilbao Vizcaya, S.A. Miami
Agency, Miami, Florida; Banco Bilbao Vizcaya, S.A.
New York Branch, New York, New York; the Federal
Reserve Bank of Atlanta; the Federal Reserve Bank
of New York; the New York State Banking Department; and the State of Florida Department of Banking and Finance.
PUBLICATION OF THE JUNE 2000 U P D A T E
TO THE BANK HOLDING
COMPANY
SUPERVISION
MANUAL
The June 2000 update to the Bank Holding Company
Supervision Manual, Supplement No. 18, has been
published and is now available. The Manual comprises the Federal Reserve System's bank holding
company supervisory and inspection guidance. The
supplement includes new or revised supervisory
information and examiner guidance on the following
topics:
1. Financial Holding Companies (FHCs). New supervisory guidance is provided for U.S. bank holding companies (BHCs) and qualifying foreign banks that desire to
become FHCs, as authorized by the Gramm-Leach-Bliley
586
Federal Reserve Bulletin • August 2000
Act (GLB Act). This section includes acquisition, control,
and other requirements with respect to engaging in
activities that the Board deems "financial in nature." See
SR letter 0 0 - 0 1 . The general and more detailed sections
include the following:
• Written declaration requirements for becoming an
FHC
• "Well managed" and "well capitalized" standards
and resources required for certification as an FHC
• Activities deemed to be "financial in nature" under
section 4(k)(4) of the BHC Act and therefore permissible
for FHCs—these include activities previously determined
to be closely related to banking, either by regulation or
order issued under section 4(c)(8), activities that are usual
in conducting banking or other services abroad under section 4(c)(13) or by interpretation in section 211.5(d) of
Regulation K, and activities determined by statute to be
financial in nature
• Divestiture requirements with respect to impermissible activities that are acquired together with permissible
activities
• Applicable notice procedures.
2. Retained Interests. Retained interests arise from
assets sold to a securitization vehicle that, in turn, issues
bonds to investors. Supervisory concerns exist about the
methods and models that are used to value these interests
and the difficulties involved in managing the risk of such
volatile assets. Generally accepted accounting principles
(GAAP) require recognition of an immediate gain (or loss)
on the sale of assets by recording its retained interest at
fair value. The fair value of retained interests should
be supported by verifiable documentation. See SR letter 99-37.
3. Credit Derivatives. Supervisory guidance is provided
on the risk-based capital treatment for credit derivatives
that are used to synthetically replicate collateralized loan
obligations (CLOs). The capital treatment for three different synthetic CLO transactions is discussed: (1) when the
entire amount of the referenced portfolio is hedged,
(2) when a high-quality senior risk position in the reference
portfolio is retained, or (3) when a first-loss position is
retained. Minimum conditions are included for sponsoring
institutions wishing to obtain the synthetic securitization
capital treatment for type two transactions. See SR letter
99-32.
4. Nonbanking Activities of Bank Holding
Companies.
General and more detailed sections describe nonbanking
activities approved for BHCs that are not FHCs, under
section 4(a)(2) or under section 4(c)(8) of the BHC Act
pursuant to the Board's Regulation Y or Board order. The
GLB Act prohibits the approval of any new nonbanking
activities under these provisions by regulation or order.
The general section describes the current sixty-day notice
procedure for BHCs, as well as changes resulting from
the GLB Act. N e w nonbanking activity summaries are
provided for activities that were approved for BHCs by
Board order before the passage of the GLB Act. They are
(1) operating a securities exchange and (2) acting as a
certification authority for digital signatures.
5. Nonbank Banks. Section 4(f) of the BHC Act was
amended by section 107 of the GLB Act. Cross marketing,
growth, and certain activity limitations and other provisions were eliminated to allow BHCs to affiliate with
securities firms and insurance companies. The general
overdraft prohibitions of section 4(f)(3) of the BHC Act
are discussed for controlled subsidiary banks of grandfathered holding companies of nonbank banks (those existing
on March 5, 1987), including when certain overdrafts are
permissible.
A more detailed summary of changes is included
with the update package. The Manual and updates,
including pricing information, are available from
Publications Services, Mail Stop 127, Board of Governors of the Federal Reserve System, Washington,
DC 20551 (or charge by facsimile: 202-728-5886).
The Manual is also available on the Board's public web site at www.federalreserve.gov/boarddocs/
supmanual/.
•
587
Minutes of the Meeting of the
Federal Open Market Committee
Held on May 16, 2000
A meeting of the Federal Open Market Committee
was held in the offices of the Board of Governors of
the Federal Reserve System in Washington, D.C., on
Tuesday, May 16, 2000, at 9:00 a.m.
Present:
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Greenspan, Chairman
McDonough, Vice Chairman
Broaddus
Ferguson
Gramlich
Guynn
Jordan
Kelley
Meyer
Parry
Mr. Hoenig, Ms. Minehan, Messrs. Moskow
and Poole, Alternate Members of the
Federal Open Market Committee
Messrs. McTeer and Stern, Presidents of the
Federal Reserve Banks of Dallas and
Minneapolis respectively
Mr.
Mr.
Ms.
Mr.
Mr.
Mr.
Ms.
Mr.
Kohn, Secretary and Economist
Bernard, Deputy Secretary
Fox, Assistant Secretary
Gillum, Assistant Secretary
Mattingly, General Counsel
Baxter, Deputy General Counsel
Johnson, Economist
Prell, Economist
Mr. Beebe, Ms. Cumming, Messrs. Eisenbeis,
Howard, Lindsey, Reinhart, Simpson,
Sniderman, and Stockton,
Associate Economists
Mr. Fisher, Manager, System Open Market Account
Mr. Winn, Assistant to the Board, Office of Board
Members, Board of Governors
Mr. Ettin, Deputy Director, Division of Research
and Statistics, Board of Governors
Messrs. Madigan and Slifman, Associate Directors,
Divisions of Monetary Affairs and Research and
Statistics respectively, Board of Governors
Messrs. Oliner and Whitesell, Assistant Directors,
Divisions of Research and Statistics and
Monetary Affairs respectively, Board of
Governors
Ms. Low, Open Market Secretariat Assistant,
Division of Monetary Affairs, Board of
Governors
Messrs. Rives and Stone, First Vice Presidents,
Federal Reserve Banks of St. Louis and
Philadelphia respectively
Messrs. Hakkio, Hunter, Lacker, Lang,
Rasche, Rolnick, and Rosenblum, Senior
Vice Presidents, Federal Reserve Banks
of Kansas City, Chicago, Richmond,
Philadelphia, St. Louis, Minneapolis,
and Dallas respectively
Messrs. Bentley and Kopcke, Vice Presidents,
Federal Reserve Banks of N e w York and
Boston respectively
By unanimous vote, the minutes of the meeting
of the Federal Open Market Committee held on
March 21, 2000, were approved.
The Manager of the System Open Market Account
reported on recent developments in foreign exchange
markets. There were no open market operations
in foreign currencies for the System's account in the
period since the previous meeting, and thus no vote
was required of the Committee.
The Manager also reported on developments in
domestic financial markets and on System open market transactions in government securities and federal
agency obligations during the period March 21, 2000,
through May 15, 2000. The Committee ratified these
transactions by unanimous vote.
With Mr. Broaddus dissenting, the Committee
voted to extend for one year beginning in mid-
588
Federal Reserve Bulletin • August 2000
December 2000 the reciprocal currency ("swap")
arrangements with the Bank of Canada and the Bank
of Mexico. The arrangement with the Bank of Canada is in the amount of $2 billion equivalent and that
with the Bank of Mexico in the amount of $3 billion
equivalent. Both arrangements are associated with
the Federal Reserve's participation in the North
American Framework Agreement, which was established in 1994. Mr. Broaddus dissented because he
believed that the swap lines existed primarily to
facilitate foreign exchange market intervention, and
he was opposed to such intervention for the reasons
he had expressed at the February meeting.
The Manager discussed some aspects of a suggested approach to the management of the System's
portfolio over coming quarters prior to the Committee's receipt and review of an ongoing study relating
to the conduct of open market operations in a period
of substantial declines in outstanding Treasury debt.
During that interim, the management of the System
portfolio should try to satisfy a number of objectives:
keeping the maturity of the portfolio from lengthening materially; meeting long-run reserve needs to the
extent possible through outright purchases of Treasury securities without distorting the yield curve or
impairing the liquidity of the market; and concentrating expansion of the System portfolio in "off-therun" securities in the secondary market to help to
maintain liquid markets in benchmark securities. It
was important to announce a strategy that would
allow market participants to take the System's operations into account as they adapted to the declining
Treasury debt levels. While no specific blueprint
could be given at this point regarding future Desk
operations, the members encouraged the Manager to
discuss his plans with Treasury officials.
The Committee then turned to a discussion of the
economic and financial outlook and the implementation of monetary policy over the intermeeting period
ahead.
The information reviewed at this meeting suggested that economic growth had remained rapid
through early spring. Consumer spending and business fixed investment were still trending upward
strongly, and housing demand was holding at a high
level. Industrial production and nonfarm payrolls
were expanding briskly in response to burgeoning
domestic demand, but the strength of demand was
also showing through in the form of rising imports.
Labor markets continued to be very tight, and some
measures of labor costs and price inflation showed
signs that they might be picking up.
Employment surged in March and April. Part of
the pickup resulted from a step-up in government
hiring of census workers, but gains in private employment were very large over the two months. Job
growth in retail trade and services was robust, and
employment in manufacturing and construction
trended higher. The civilian unemployment rate
dropped in April to 3.9 percent, a thirty-year low.
Industrial production accelerated in April after a
strong gain in the first quarter. Manufacturing, notably in high-tech industries, led the way, but growth
in mining and utilities also was sizable. The pickup
in manufacturing lifted the factory operating rate
further, and capacity utilization in April was about
equal to its long-term average.
Consumer spending increased very rapidly in the
first quarter but apparently decelerated early in the
second quarter. Nominal retail sales were down
slightly in April after brisk gains in February and
March. Sales slumped at durable goods stores and
changed little at nondurable goods outlets. However,
the underlying trend in spending remained strong as a
result of robust expansion of disposable incomes, the
large accumulated gains in household wealth, and
very positive consumer sentiment.
Residential housing activity stayed at an elevated
level in April; total private housing starts edged
higher while starts of multifamily units partially
reversed a sharp drop in March. Sales of both new
and existing single-family homes rose in March (latest data). The persisting strong demand for housing
during a period of rising mortgage rates apparently
was being underpinned by the rapid growth of jobs
and the accumulated gains in stock market wealth.
Business fixed investment was up sharply in the
first quarter after a sluggish performance late last
year. The pickup encompassed both durable equipment and software and nonresidential structures.
Shipments of computing and communications equipment surged following the century rollover, and shipments of other non-aircraft capital goods recorded
an unusually large rise as well. Moreover, the recent
strength in orders for many types of equipment
pointed to further advances in capital spending in
coming months. Expenditures for nonresidential
structures, which had turned up last autumn, rose
rapidly in the first quarter; unusually favorable
weather over the two quarters likely was a contributing factor. The upturn in nonresidential building
activity was spread broadly across the major types
of structures.
The pace of accumulation of manufacturing and
trade inventories slowed somewhat in the first quarter
following a sizable buildup in late 1999, and the
aggregate inventory-sales ratio edged down from an
already very low level. Stockbuilding by manufactur-
Minutes of the Federal Open Market Committee
ers and merchant wholesalers picked up slightly in
the first quarter, but stocks remained at low levels in
relation to sales. By contrast, inventory investment
slowed among retailers. Part of this slowdown might
have involved a liquidation of precautionary stocks
built up in anticipation of the century date change.
The inventory-sales ratio in this sector was at a
historically lean level.
The U.S. trade deficit in goods and services reached
another a new high in February as the value of
imports rose sharply further and the value of exports
changed little. For the January-February period, the
moderate rise in exports and the sharp increase in
imports from fourth-quarter levels were spread across
most major trade categories. The available information suggested that economic expansion remained
robust in most foreign industrial economies. The
recent decline in the exchange value of the euro was
spurring economic activity in the euro area, and
Canada was benefiting from spillovers from the U.S.
economy. For the Japanese economy, which had been
the notable exception among the foreign industrial
economies, there were indications of some strengthening of aggregate demand during the first five
months of the year. Economic activity in the developing countries also continued to pick up. Key South
American countries were recovering from recent
recessions, while several Asian emerging-market
countries were settling into growth at more sustainable rates.
Recent information suggested that price inflation
might be picking up slightly and only partly as a
direct result of increases in energy prices. Although
consumer prices were unchanged in April, they
recorded sizable step-ups in February and March;
moreover, while the rise in core consumer prices over
the twelve months ended in April was the same as the
change in the year-earlier twelve-month period, core
consumer price inflation was up slightly in the
March-April period compared with other recent
months. At the producer level, prices of finished
goods other than food and energy edged higher in
March and April, but the increase over the twelve
months ended in February was a little smaller than
the rise over the preceding twelve months. With
regard to labor costs, the employment cost index for
hourly compensation of private industry workers
registered a larger advance in the first quarter than
in previous quarters, and the rate of increase in compensation over the year ended in March was substantially larger than the rise over the year-earlier period.
Faster growth in benefits accounted for more than
half of the acceleration. Average hourly earnings of
production or nonsupervisory workers grew at a
589
slightly faster rate in April than in March, and the
increase for the twelve months ended in April was
larger than for the previous twelve-month period.
At its meeting on March 21, 2000, the Committee
adopted a directive that called for a slight tightening
of conditions in reserve markets consistent with an
increase of lA percentage point in the federal funds
rate to an average of about 6 percent. The members
saw substantial risks of rising pressures on labor and
other resources and of higher inflation, and they
agreed that the tightening action would help bring the
growth of aggregate demand into better alignment
with the sustainable expansion of aggregate supply.
They also noted that even with this additional firming
the risks were still weighted mainly in the direction
of rising inflation pressures and that more tightening
might be needed.
Open market operations during the intermeeting
period were directed toward implementing the
desired slightly tighter pressure on reserve positions,
and the federal funds rate averaged very close to
the Committee's 6 percent target. The Committee's
action and its announcement were widely anticipated
and had little initial effect on financial markets. Later
in the week, however, market interest rates moved
up in response to the release of the minutes of the
February meeting and the mention therein of some
sentiment for a larger policy tightening than had
been undertaken. Subsequently, interest rates fell as
stock prices tumbled over the first half of April,
when investors seemed to revise downward their
assessments of equity valuations, especially those of
more speculative technology shares that previously
had risen considerably. Interest rates more than
reversed those declines, however, when stock prices
began to level out and incoming data suggested that
aggregate demand continued to expand faster than
potential supply and that wage and price developments were becoming more worrisome. On balance
over the intermeeting period, private interest rates
moved up appreciably while Treasury yields
increased somewhat less. Most major indexes of
equity prices declined significantly over the intermeeting period.
In foreign exchange markets, the trade-weighted
value of the dollar appreciated considerably over the
intermeeting period against a basket of major currencies, reflecting in part the larger intermeeting increase
in U.S. long-term yields relative to rates in most
foreign industrial countries. The dollar's rise against
the euro was sizable, but the dollar also made moderate gains against the British pound, the Japanese yen,
and the Canadian dollar. The dollar also appreciated
somewhat against the currencies of a group of other
590
Federal Reserve Bulletin • August 2000
important trading partners, notably the Mexican peso
and the Brazilian real.
Growth of M2 picked up further in April from its
already strong pace in March, as households boosted
their liquid balances to meet higher-than-usual levels
of final payments on 1999 taxes. In contrast, M3
growth slowed considerably in April after a robust
March advance. From the fourth quarter of 1999
through April, M2 and M3 expanded at rates well
above the upper ends of their annual ranges for 2000.
Total domestic nonfinancial debt continued to expand
at a pace in the upper portion of its range.
The staff forecast prepared for this meeting continued to suggest that the expansion would gradually
moderate from its currently elevated pace to a rate
around, or perhaps a little below, the growth of the
economy's estimated potential. The expansion of
domestic final demand increasingly would be held
back by the anticipated waning of positive wealth
effects associated with earlier large gains in equity
prices and by higher interest rates. As a result, the
growth of spending on consumer durables and houses
was expected to slow; in contrast, however, overall
business investment in equipment and software was
projected to remain robust, partly because of the
upward trend in replacement demand, especially for
computers and software. In addition, continued solid
economic growth abroad was expected to boost the
growth of U.S. exports for some period ahead. Core
price inflation was projected to rise noticeably over
the forecast horizon, partly as a result of higher
import prices and some firming of gains in nominal
labor compensation in persistently tight labor markets that would not be fully offset by productivity
growth.
In the Committee's review of current and prospective economic and financial developments, members
focused on persisting indications that aggregate
demand was expanding more rapidly than potential
supply and that pressures on labor and other producer
resources were continuing to increase. While there
were tentative signs that the growth of demand might
be moderating in some key sectors of the economy,
such as retail sales and housing, clear-cut evidence
of any significant deceleration in the rapid growth
of aggregate demand was lacking. Bond yields and
other financial conditions had firmed to some extent
recently, but those adjustments had been influenced
by the buildup in market expectations of more monetary policy tightening. In the absence of further
monetary restraint, any slowing over coming quarters was not viewed as likely to be sufficient to
avert increasing pressures on the economy's already
strained resources and rising inflation rates that would
undermine the economy's remarkable performance.
Adding to concerns about heightened inflation pressures was statistical and anecdotal evidence that
could be read as suggesting that underlying inflation
already was beginning to pick up. Unit costs, however, were still remarkably subdued, and members
saw no developments at this stage that might augur a
sharp near-term deterioration in price inflation.
In their assessment of business conditions across
the country, members commented on continuing
indications of robust economic activity in all regions
and widely increasing pressures on labor and other
resources. Indeed, economic activity appeared to
have grown appreciably further from already elevated
levels in numerous parts of the country, although the
latest regional data and anecdotal reports provided
scattered indications that business conditions might
be starting to soften in some areas. In this regard,
members referred to the emergence of slightly more
cautious attitudes on the part of some business executives concerning the prospects for their industries.
With respect to developments in key expenditure
sectors of the economy, growth in consumer spending was expected to slow from the exceptional pace
of the first quarter, though still likely to be relatively
robust. Retail sales had edged lower in April, but
members commented that it was too early to gauge
whether this softening was a harbinger of a more
moderate trend. Consumer sentiment had remained
upbeat in the context of an extended period of sizable
expansion in employment and incomes and the sharp
rise in stock market prices over the course of recent
years. Some members observed that the slightly less
ebullient consumer behavior recently might have
been influenced to some extent by the volatility and
downward movement in the stock market over the
course of the past several weeks. Higher financing
costs probably were also beginning to play a role.
Looking ahead, the experience of recent years amply
demonstrated the difficulty of forecasting the performance of the stock market. The failure of further
large increases to materialize, should that occur,
would over time imply a more neutral or even a
negative net impact from wealth once the positive
effects of the earlier advance had played themselves
out, but the latter would take some time.
The same background factors were likely to govern
the prospective behavior of housing activity. The
evidence of a downturn in homebuilding was still
quite marginal, but some anecdotal reports suggested
that higher mortgage rates were starting to exert a
retarding influence on housing demand. Even so,
members continued to identify areas of remarkable
strength across the nation, and overall housing con-
Minutes of the Federal Open Market Committee
struction remained at an elevated level. On the
assumption of further growth in jobs and incomes
in line with current forecasts and absent markedly
higher mortgage financing costs, housing activity
might reasonably be expected to settle at a level a bit
below recent highs.
Business investment spending retained strong
upward momentum, though it had exhibited an
uneven growth pattern in recent quarters that importantly reflected Y2K effects. Looking ahead, further
rapid growth was expected in spending for business
equipment and software in light of likely ongoing
efforts to hold down costs by substituting capital
embodying advanced technology for scarce labor
resources. Recent order trends and rising capacity
utilization rates were consistent with this expectation.
Expenditures on nonresidential structures and other
construction generally had strengthened in recent
months, and members expected them to be well
maintained in part because of heavy spending on
roads and other public projects by state and local
governments.
The foreign trade sector of the economy was
projected to provide less of a safety valve for the
accommodation of domestic demand going forward.
Although a number of foreign nations continued to
face political and economic problems, the strengthening economies of many U.S. trading partners would
tend to limit the availability of excess foreign production capacity to help meet the growth in U.S.
demand. At the same time, foreign demand for U.S.
goods and services would be expanding, thereby adding to demand pressures on U.S. producer resources,
other things equal. In the latter regard, several members mentioned anecdotal evidence of growing export
demand for a variety of domestic products.
In their discussion of the outlook for inflation, the
members focused on statistical and anecdotal indications of further tightening of labor resources, acceleration in some measures of labor compensation, and
early signs of a possible upturn in underlying price
inflation. Data on employment, reinforced by anecdotal commentary from around the country, continued to provide evidence of extremely tight labor
markets, which at least in some parts of the country
appeared to have tightened further since early in the
year. Business contacts spoke of spending a great
deal of time and expense to attract and retain workers
while concomitantly persisting in efforts to improve
the productivity of their operations to accommodate
burgeoning growth in demand in the face of labor
force constraints. There were more reports that rising
wages and benefits and increasing costs of nonlabor
inputs could no longer be fully offset by improve
591
ments in productivity, and more business firms
appeared to be attempting or considering increases in
their selling prices to maintain or improve their profit
margins. However, their ability to set higher prices,
or at least to raise them significantly, continued to be
severely constrained by the persistence of strong
competition across much of the economy. Indeed,
examples of successful efforts to mark up prices,
which tended to be concentrated in products using
oil-related inputs, were still the exception. Even so,
the members believed that the risks of acceleration
in core prices were now appreciably higher given
current trends in aggregate demand, pressures on
resources, and developments in foreign economies.
In the Committee's discussion of policy for the
intermeeting period ahead, all the members endorsed
a proposal to tighten reserve conditions sufficiently
to raise the federal funds rate by V2 percentage point
to a level of 6V2 percent. A more forceful policy
move than the 25 basis point increases that had been
implemented since mid-1999 was desirable in light
of the extraordinary and persisting strength of overall
demand, exceeding even the increasingly rapid
growth of potential supply, and the attendant indications of growing pressures in already tight markets
for labor and other resources. The strength in demand
might itself be, at least in part, the result of the
ongoing acceleration of productivity, with the latter
feeding back on demand through higher equity prices
and profitable investment opportunities. Financial
markets seemed to have recognized the need for real
interest rates to rise further under these circumstances, and while market assessments were not
always correct, the evidence suggested that a more
substantial tightening at this meeting was needed
to limit inflation pressures. The members saw little
risk in a relatively aggressive policy move, given the
strong momentum of the expansion and widespread
market expectations of such a move. The greater risk
to the economic expansion at this point was for
policy to be too sluggish in adjusting, thereby allowing inflationary disturbances and dislocations to
build. A 50 basis point adjustment was more likely to
help forestall a rise in inflationary expectations that,
at least in the opinion of some members, already
showed signs of worsening. A widespread view that
the Federal Reserve would take whatever steps were
needed to hold down inflation over time probably had
contributed to the persistence of subdued long-run
inflation expectations during an extended period
when rapidly rising demand was pressing on limited
supply resources. Today's policy move would undergird such relatively benign expectations and help
ensure the success of the Committee's policy.
592
Federal Reserve Bulletin • August 2000
The members agreed that the balance of risks
sentence that would be included in the press statement to be released shortly after this meeting should
indicate, as it had for other recent meetings, that even
after today's tightening action the members believed
the risks would remain tilted toward rising inflation.
This view of the risks was based primarily on the
persisting momentum of aggregate demand growth
and the unusually high level of labor resource utilization. At the same time, a number of the members
commented that they did not want to prejudge the
potential extent or pace of future policy tightening
and that the Committee should continue to assess the
need for further policy moves in the light of evolving
economic conditions to be reviewed on a meeting-bymeeting basis.
At the conclusion of this discussion, the Committee voted to authorize and direct the Federal Reserve
Bank of New York, until it was instructed otherwise,
to execute transactions in the System Account in
accordance with the following domestic policy
directive:
The Federal Open Market Committee seeks monetary and financial conditions that will foster price stability
and promote sustainable growth in output. To further
its long-run objectives, the Committee in the immediate
future seeks conditions in reserve markets consistent with
increasing the federal funds rate to an average of around
6V2 percent.
The vote also encompassed approval of the sentence below for inclusion in the press statement to be
released shortly after the meeting:
Against the background of its long-run goals of price
stability and sustainable economic growth and of the information currently available, the Committee believes the
risks are weighted mainly toward conditions that may
generate heightened inflation pressure in the foreseeable
future.
Votes for this action: Messrs. Greenspan, McDonough,
Broaddus, Ferguson, Gramlich, Guynn, Jordan, Kelley,
Meyer, and Parry. Votes against this action: None.
It was agreed that the next meeting of the Committee would be held on Tuesday-Wednesday,
June 27-28, 2000.
The meeting adjourned at 1:05 p.m.
Donald L. Kohn
Secretary
593
Legal Developments
ORDERS ISSUED UNDER BANK HOLDING COMPANY
ACT
Orders Issued Under Section 3 of the Bank Holding
Company Act
Banco Comercial Portugues, S.A.
Oporto, Portugal
Banco Portugues do Atlantico, S.A.
Oporto, Portugal
Banco Comercial, with consolidated assets of $62 billion, is the largest banking organization in Portugal. 2 Atlantico, a Banco Comercial subsidiary, operates internationally through numerous branches and agencies, including a
state-licensed branch in New York, N e w York, and a
state-licensed agency in Miami, Florida. Through their
subsidiaries and affiliates, Banco Comercial and Atlantico
also engage in and outside Portugal in a variety of nonbanking activities, including asset management, real estate
and equipment leasing, and investment banking.
Competitive
BCP-IF S.G.P.S., Lda
Lisbon, Portugal
BPA Internacional, S.G.P.S. Sociedade Unipessoal
Lda
Funchal, Madeira, Portugal
Banco Portugues do Atlantico (USA), Inc.
Newark, New Jersey
Order Approving Formation of Bank Holding Companies
and Acquisition of a Bank
Banco Comercial Portugues, S A . ("Banco Comercial"),
Banco Portugues do Atlantico, S A . ("Atlantico"), BCP-IF
S.G.P.S., Lda, BPA Internacional, S.G.P.S. Sociedade Unipessoal Lda, and Banco Portugues do Atlantico (USA),
Inc. ("BPA-USA") (collectively, "Applicants"), have requested the Board's approval under section 3(a)(1) of the
Bank Holding Company Act ("BHC Act") (12 U.S.C.
§ 1842(a)(1)) to become bank holding companies by acquiring up to 100 percent of the voting shares of BPABank,
National Association, Newark, New Jersey ("Bank"), a
de novo national bank to be established by Atlantico. 1
BPA-USA would be the direct parent company of Bank.
Notice of the application, affording interested persons an
opportunity to comment, has been published (64 Federal
Register 53,390 (1999)). The time for filing comments has
expired, and the Board has considered the application and
all comments received in light of the factors enumerated in
section 3 of the BHC Act.
1. Banco Comercial recently has consummated mergers with other
Portuguese banking organizations and is in the process of completing
an internal corporate reorganization. Banco Comercial has provided
the Board with assurances that the acquisition of Bank by the resulting
organization will be done in compliance with the BHC Act.
and Convenience
and Needs
Considerations
Section 3 of the BHC Act prohibits the Board from approving a proposal that would result in a monopoly. The BHC
Act also prohibits the Board from approving a proposed
acquisition that would substantially lessen competition or
tend to create a monopoly in any relevant banking market,
unless the anticompetitive effects of the proposal clearly
are outweighed in the public interest by the probable effect
of the proposal in meeting the convenience and needs of
the community to be served. 3
Consummation of the proposed transaction would result
in the establishment of a de novo bank in the relevant
banking market and thereby would increase the number of
alternative sources of banking products and services available to customers. In addition, the Board previously has
noted that the establishment of a de novo bank enhances
competition in affected banking markets and reflects positively on competitive considerations in an application under section 3 of the BHC Act. 4 Moreover, there is no
evidence that the proposed transaction would create or
further a monopoly or lessen competition in any relevant
banking market. Accordingly, the Board concludes that
consummation of the proposal would not have a significantly adverse effect on competition or on the concentration of banking resources in any relevant banking market
and that competitive considerations are consistent with
approval. 5
2. Asset and ranking data are as of January 1, 2000, adjusted to
reflect transactions recently consummated by Banco Comercial, and
use exchange rates then in effect.
3. 12 U.S.C. § 1842(c)(1).
4. See Canadian Imperial Bank of Commerce, 85 Federal Reserve
Bulletin 733 (1999); see also Wilson Bank Holding
Company,
82 Federal Reserve Bulletin 568 (1996).
5. On consummation of the proposal, New Jersey will be the home
state of Applicants and Bank for purposes of the BHC Act. The
proposed transaction therefore is not barred by section 3(d) of the
BHC Act. See 12 U.S.C. §§ 1841(o)(4), 1842(d). New York is Atlantic ' s home state for purposes of the International Banking Act ("IBA")
594
Federal Reserve Bulletin • August 2000
The BHC Act also requires the Board to consider the
effect of the transaction on the convenience and needs of
the communities to be served, and the Board has reviewed
the information presented by Banco Comercial related to
the convenience and needs factor. The Board concludes,
based on all the facts of record, that the considerations
relating to the convenience and needs of the communities
to be served are consistent with approval.
Financial,
Managerial,
and Supervisory
Considerations
The BHC Act requires the Board to consider the financial
and managerial resources and future prospects of the companies and banks involved in a bank acquisition proposal.
In assessing the financial and managerial strength of Banco
Comercial, Atlantico, and their affiliates, the Board has
reviewed information provided by Applicants, confidential
supervisory and examination information, and publicly reported and other financial information. The capital ratios of
Banco Comercial and Atlantico exceed the minimum levels that would be required under the Basle Capital Accord
and are considered equivalent to the capital ratios that
would be required of a U.S. banking organization. In light
of these and all the facts of record, the Board concludes
that the financial and managerial resources and future
prospects of Applicants and Bank are consistent with approval.
Section 3 of the BHC Act also provides that the Board
may not approve an application involving a foreign bank
unless the bank is "subject to comprehensive supervision
or regulation on a consolidated basis by the appropriate
authorities in the bank's home country." 6 The home country supervisor of Banco Comercial is the Bank of Portugal.
In approving applications under the BHC Act and the IBA,
the Board has determined that other Portuguese banks were
subject to comprehensive consolidated supervision by the
Bank of Portugal. 7 In this case, the Board finds that the
Bank of Portugal supervises Banco Comercial in substantially the same manner as it supervises those other banks.
Based on this finding and all the facts of record, the Board
concludes that Banco Comercial is subject to comprehensive supervision on a consolidated basis by their home
country supervisor.
and the Board's Regulation K. See 12 U.S.C. § 3101 et seq. and 12
C.F.R. § 211 et seq.
6. 12 U.S.C. § 1842(c)(3)(B). Under Regulation Y, the Board uses
the standards enumerated in Regulation K to determine whether a
foreign bank that has applied under section 3 of the BHC Act is
subject to consolidated home country supervision. See 12 C.F.R.
§ 225.13(a)(4). Regulation K provides that a foreign bank will be
considered to be subject to comprehensive supervision or regulation
on a consolidated basis if the Board determines that the bank is
supervised and regulated in such a manner that its home country
supervisor receives sufficient information on the worldwide operations
of the bank, including its relationship to any affiliates, to assess the
bank's overall financial condition and its compliance with law and
regulation. See 12 C.F.R. 211.24(c)(1).
7. See Banco Espirito Santo, et.al., 86 Federal Reserve Bulletin 418
(2000); see also Caixa Geral de Depositos S.A., 85 Federal Reserve
Bulletin 11A (1999).
In addition, section 3 of the BHC Act requires the Board
to determine that a foreign bank has provided adequate
assurances that it will make available to the Board such
information on its operations and activities and those of its
affiliates that the Board deems appropriate to determine
and enforce compliance with the BHC Act. 8 The Board has
reviewed the restrictions on disclosure in relevant jurisdictions in which Banco Comercial and Atlantico operate and
has communicated with relevant government authorities
concerning access to information. In addition, Banco Comercial and Atlantico have committed to make available to
the Board such information on the operations of Banco
Comercial, Atlantico, and any of their affiliates that the
Board deems necessary to determine and enforce compliance with the BHC Act, the IBA, and other applicable
federal law. Banco Comercial and Atlantico also have
committed to cooperate with the Board to obtain any
waivers or exemptions that may be necessary to enable
Banco Comercial and Atlantico to make such information
available to the Board. In light of these commitments, the
Board concludes that Banco Comercial and Atlantico have
provided adequate assurances of access to any appropriate
information that the Board may request. Based on these
and all the facts of record, the Board concludes that the
supervisory factors it is required to consider are consistent
with approval.
Conclusion
Based on the foregoing, and in light of all the facts of
record, the Board has determined that the application
should be, and hereby is, approved. 9 The Board's approval
specifically is conditioned on compliance by Banco Comercial and Atlantico with all the commitments made in connection with this application and on the Board's receiving
access to information on the operations or activities of
Banco Comercial, Atlantico, and any of their affiliates that
the Board deems to be appropriate to determine and enforce compliance by Banco Comercial, Atlantico, and their
affiliates with applicable federal statutes. If any restrictions
on access to information on the operations or activities of
Banco Comercial, Atlantico, and their affiliates subsequently interfere with the Board's ability to obtain information to determine and enforce compliance by Banco Comercial, Atlantico, or their affiliates with applicable federal
statutes, the Board may require or, when appropriate, recommend to the Office of the Comptroller of the Currency,
termination of any of Banco Comercial's or Atlantico's
direct or indirect activities in the United States. All the
commitments and conditions on which the Board has relied
in reaching its decision are deemed to be conditions imposed in writing by the Board in connection with its
findings and decision and, as such, may be enforced in
proceedings under applicable law.
8. See 12 U.S.C. § 1842(c)(3)(A).
9. In a separate action, the Board today approved under the IBA the
application of Banco Comercial to establish a representative office in
Miami, Florida.
Legal Developments
This transaction shall not be consummated before the
fifteenth calendar day after the effective date of this order,
and the proposal may not be consummated later than three
months after the effective date of this order, unless such
period is extended for good cause by the Federal Reserve
Bank of N e w York, acting pursuant to delegated authority.
B y order of the Board of Governors, effective June 30,
2000.
Voting for this action: Chairman Greenspan, Vice Chairman Ferguson, and Governors Kelley and Gramlich. Absent and not voting:
Governor Meyer.
595
States. 1 Compass operates banks in Alabama, Arizona,
Colorado, Florida, N e w Mexico, and Texas. Compass is
the sixth largest banking organization in Arizona, controlling $1.1 billion in deposits, representing approximately
2.7 percent of total deposits in insured depository institutions in the state ("state deposits"). 2
Founders is the twelfth largest banking organization in
Arizona, controlling deposits of $302.5 million, representing less than 1 percent of state deposits. After consummation of the proposal, Compass would b e c o m e the fifth
largest banking organization in Arizona, controlling deposits of $1.4 billion, representing approximately 3.4 percent
of state deposits.
ROBERT DEV. FRIERSON
Associate
Secretary
of the Board
Compass Bancshares, Inc.
Birmingham, Alabama
Compass Bank
Birmingham, Alabama
Order Approving Acquisition of a Bank Holding
Company and Merger of Banks
Compass Bancshares, Inc. ("Compass"), a bank holding
company within the meaning of the Bank Holding Company Act ( " B H C Act"), has requested the Board's approval under section 3 of the B H C Act (12 U.S.C. § 1842)
to acquire all the voting shares of Founders Bancorp, Inc.,
("Founders"), and thereby to acquire its wholly owned
subsidiary, Founders Bank of Arizona ("Founders Bank"),
both in Scottsdale, Arizona. Compass Bank, a subsidiary
bank of Compass, also has requested the Board's approval
under section 18(c) of the Federal Deposit Insurance Act
(the "Bank Merger Act") (12 U.S.C. § 1828(c)) to merge
with Founders Bank and to retain and operate branches at
the current locations of Founders Bank's offices as listed in
Appendix A.
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published
(65 Federal Register 25,329 (2000)) in accordance with
the Board's Rules of Procedure (12 C.F.R. 262.3(b)). A s
required by the Bank Merger Act, notice of the proposal
also has been published in relevant newspapers, and reports on the competitive effects of the bank merger have
been requested from the United States Attorney General,
the Office of the Comptroller of the Currency ("OCC"),
and the Federal Deposit Insurance Corporation ("FDIC").
The time for filing comments has expired, and the Board
has considered the proposal and all comments received in
light of the factors set forth in the B H C Act and the Bank
Merger Act.
Compass, with total consolidated assets of $18.5 billion,
is the forty-third largest commercial banking organization
in the United States, controlling less than 1 percent of the
total assets of insured commercial banks in the United
Interstate
Analysis
Section 3(d) of the B H C Act allows the Board to approve
an application by a bank holding company to acquire
control of a bank located in a state other than the home
state of the bank holding company if certain conditions are
met. 3 For purposes of the B H C Act, the home state of
Compass is Alabama, 4 and Compass proposes to acquire
Founders Bank in Arizona. 5 All the conditions for an
interstate acquisition enumerated in section 3(d) are met in
this case. 6 In light of all the facts of record, the Board is
permitted to approve the proposal under section 3(d) of the
B H C Act.
Competitive
Considerations
The B H C Act and the Bank Merger Act prohibit the Board
from approving a proposal if it would result in or be in
furtherance of a monopoly. These acts also prohibit the
Board from approving a proposal if the effect of the proposal may be substantially to lessen competition in any
relevant market unless the Board finds that the anticompetitive effects of the proposed transaction are clearly out-
1. All asset data are as of March 31, 2000. All deposit data are as of
June 30, 1999.
2. In this context, depository institutions include commercial banks,
savings banks, and savings associations.
3. See 12 U.S.C. 1842(d).
4. A bank holding company's home state is that state in which the
total deposits of all banking subsidiaries of such company were the
largest on July 1, 1966, or the date on which the company became a
bank holding company, whichever is later. 12 U.S.C. § 1841(o)(4)(C).
5. For purposes of section 3(d), the Board considers a bank to be
located in the states in which the bank is chartered, headquartered, or
operates a branch. See 12 U.S.C. §§ 1841(o)(4)-(7), and 1842(d)(1)(A)
and (d)(2)(B).
6. Compass is adequately capitalized and adequately managed, as
defined by applicable law. 12 U.S.C. § 1842(d)(1)(A). Founders Bank
has been in existence and operated for more than the minimum period
of time required by applicable state law. 12 U.S.C. § 1842(d)(1)(B);
Ariz. Rev. Stat. Ann. § 6 - 3 2 4 (five years). On consummation of the
proposal, Compass would control less than 10 percent of the total
amount of deposits of insured depository institutions in the United
States, and less than 30 percent of the deposits held by insured
depository institutions in Arizona. 12 U.S.C. § 1842(d)(2); Ariz. Rev.
Stat. Ann. § 6-328. All other requirements of section 3(d) of the BHC
Act would be met on consummation of the proposal.
596
Federal Reserve Bulletin • August 2000
weighed in the public interest by the probable effect of the
transaction in meeting the convenience and needs of the
community to be served. 7
Compass and Founders compete directly in the Payson,
Phoenix, and Prescott banking markets, all in Arizona. 8
Consummation of the proposal would be consistent with
the Department of Justice Merger Guidelines ("DOJ
Guidelines") 9 and Board precedent in the Phoenix and
Prescott banking markets. 10
In the Payson banking market, Compass is the third
largest of seven banking organizations, and controls deposits of $31.7 million, representing approximately 15.9 percent of total deposits in insured depository institutions in
the market ("market deposits"). 11 Founders is the fifth
largest banking organization in the market and controls
deposits of $13.4 million, representing approximately
6.7 percent of market deposits. On consummation of the
proposal, Compass would become the second largest banking organization in the market with deposits of $45.1
million, representing approximately 22.6 percent of market
deposits. The HHI would increase by 212 points to 2756.
In reviewing the competitive effects of this proposal, the
Board has considered that several factors appear to mitigate the likely effect of the proposal on competition in the
Payson banking market. Six depository institutions would
remain in the market after consummation of the proposal,
including four large multistate banking organizations other
than Compass, and three of these organizations would each
have market shares of more than 15 percent. The Payson
banking market also has characteristics that make it attractive for entry. The market's population has increased 52
percent since 1990, significantly more than the 30 percent
7. 12 U.S.C. §§ 1842(c)(1)(B) and 1828(c)(5)(B).
8. The Payson banking market is defined as the northwest corner of
Gila County, and includes all banking offices in Payson and Pine. The
Phoenix banking market is defined as the Phoenix-Mesa Metropolitan
Statistical Area. The Prescott banking market is defined as Central
Yavapai County and includes all banking offices in Chino Valley,
Mayer, Prescott, and Prescott Valley.
9. Under the revised DOJ Guidelines, 49 Federal Register 26,823
(June 29, 1984), a market in which the post-merger HerfindahlHirschman Index ("HHI") is above 1800 is considered highly concentrated. The Department of Justice has informed the Board that a bank
merger or acquisition generally will not be challenged (in the absence
of other factors indicating anticompetitive effects) unless the postmerger HHI is at least 1800 and the merger increases the HHI by more
than 200 points. The Department of Justice has stated that the higher
than normal HHI thresholds for screening bank mergers for anticompetitive effects implicitly recognize the competitive effect of limitedpurpose lenders and other nondepository financial entities.
10. The competitive effects of the proposal in these banking markets
are summarized in Appendix B. The data are based on calculations in
which the deposits of thrift institutions are included at 50 percent. The
Board previously has indicated that thrift institutions have become, or
have the potential to become, significant competitors of commercial
banks. See Midwest Financial Group, 75 Federal Reserve Bulletin
386 (1989); National City Corporation, 70 Federal Reserve Bulletin
743 (1984). Thus, the Board has regularly included thrift deposits in
the calculation of market share on a 50-percent weighted basis. See,
e.g., First Hawaiian, Inc., 11 Federal Reserve Bulletin 52 (1991).
11. Deposit data for this market are adjusted to include branches
opened after June 30, 1999.
increase for Arizona as a whole. In 1999, per capita and
median household income were higher in the market than
in non-metropolitan statistical areas in Arizona as a whole.
Since 1996, five banking organizations have entered the
Payson banking market, three (including Compass Bank)
by branching and two (including Founders Bank) by acquisition. 12 Two organizations have entered the market in the
past year.
The Justice Department reviewed the proposal and advised the Board that consummation of the proposal would
not likely have any significantly adverse competitive effects in the Payson banking market or any other relevant
banking market. The FDIC and OCC have not objected to
the proposal.
Based on all the facts of record, and for the reasons
discussed in this order, the Board concludes that consummation of the proposal is not likely to result in any significantly adverse effects on competition or on the concentration of banking resources in the Payson banking market or
any other relevant market. In this light, the competitive
factors are consistent with approval.
Other
Considerations
The BHC Act and the Bank Merger Act require the Board,
in acting on an application, to consider the financial and
managerial resources and future prospects of the companies and banks involved, the convenience and needs of the
communities to be served, and certain supervisory factors.
The Board has reviewed these factors in light of the record,
including supervisory reports of examination assessing the
financial and managerial resources of the organizations and
financial information provided by Compass. Based on all
the facts of record, the Board concludes that the financial
and managerial resources and the future prospects of Compass and Compass Bank are consistent with approval, as
are the other supervisory factors the Board must consider
under section 3 of the BHC Act. In addition, considerations
related to the convenience and needs of the communities to
be served, including the records of performance of the
institutions under the Community Reinvestment Act, are
consistent with approval of the proposal.
Conclusion
Based on the foregoing, and in light of all the facts of
record, the Board has determined that the applications in
this case should be, and hereby are, approved. The Board's
approval is specifically conditioned on compliance by
Compass with all the commitments made in connection
with these applications. For purposes of this action, the
commitments and conditions relied on by the Board in
reaching its decision are deemed to be conditions imposed
in writing by the Board in connection with its findings and
12. During this period, the market has become less concentrated as
measured by the HHI.
Legal Developments
decision and, as such, may be enforced in proceedings
under applicable law.
The proposed acquisitions shall not be consummated
before the fifteenth calendar day after the effective date of
this order, or more than three months after the effective
date of this order, unless such period is extended for good
cause by the Board or by the Federal Reserve Bank of
Atlanta, acting pursuant to delegated authority.
By order of the Board of Governors, effective June 30,
2000.
Voting for this action: Chairman Greenspan, Vice Chairman Ferguson, and Governors Kelley and Gramlich. Absent and not voting:
Governor Meyer.
ROBERT DEV. FRIERSON
Associate
Secretary
of the
Board
Appendix A
Branches
Founders
1.
2.
3.
4.
5.
6.
7.
8.
9.
of Compass
Bank to be established
Bank's current offices in
Arizona:
104 East Highway 260, Pay son.
2 1 6 4 0 North 19th Avenue, Phoenix.
923 East Gurley Street, Prescott.
7335 East Doubletree Ranch Road, Scottsdale.
15685 North Greenway-Hayden Loop, Suite
Scottsdale.
2 3 3 0 5 North Pima Road, Scottsdale.
19202 R.H. Johnson Boulevard, Sun City.
9915 West Bell Road, Sun City.
12026 North 111th Avenue, Youngtown.
at
100-A,
Appendix B
Summary
of Market
Structure
Phoenix banking market. Compass is the eleventh largest
banking organization in the market, controlling deposits
of approximately $222.5 million, representing less than
1 percent of market deposits. Founders is the ninth largest
banking organization in the market, controlling deposits of
approximately $281.3 million, representing 1 percent of
market deposits. After consummation of the proposal,
Compass would b e c o m e the sixth largest banking organization in the market, controlling deposits of approximately
$503.8 million, representing 1.8 percent of market deposits. The HHI would increase by 2 points to 2282.
Prescott banking market. Compass is the ninth largest
banking organization in the market, controlling deposits of
approximately $14.8 million, representing 1.5 percent of
market deposits. Founders is the eleventh largest banking
organization in the market, controlling deposits of approximately $7.8 million, representing less than 1 percent of
market deposits. After consummation of the proposal,
Compass would b e c o m e the eighth largest banking organization in the market, controlling deposits of approximately
$22.6 million, representing 2.3 percent of market deposits.
The HHI would increase by 2 points to 1886.
National
Memphis,
Commerce
Tennessee
597
Bancorporation
Order Approving Merger of Bank Holding Companies
National Commerce Bancorporation ("National Commerce"), a bank holding company within the meaning of
the Bank Holding Company Act ( " B H C Act"), has requested the Board's approval under section 3 of the B H C
Act (12 U.S.C. § 1842) to merge with CCB Financial
Corporation ("CCB Financial"), and thereby acquire Central Carolina Bank and Trust Company ("CCB Bank"),
both of Durham, North Carolina. 1
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published
(65 Federal Register 24,959 (2000)). The time for filing
comments has expired, and the Board has considered the
proposal in light of the factors set forth in section 3 of the
B H C Act.
National Commerce, with total consolidated assets of
$6.8 billion, is the 105th largest commercial banking organization in the United States, controlling less than 1 percent of the total assets of insured commercial banks in the
United States. 2 National Commerce operates subsidiary
depository institutions in Tennessee, North Carolina, Georgia, Virginia, West Virginia, Arkansas, and Mississippi.
The depository institution controlled by National Commerce is the 22nd largest depository institution in North
Carolina, controlling deposits of $ 3 3 5 . 4 million, representing less than 1 percent of total deposits in depository
institutions in the state. 3
CCB Financial, with total consolidated assets of
$8.2 billion, is the 91st largest commercial banking organization in the United States, controlling less than 1 percent
of the total assets of insured commercial banks in the
United States. CCB Financial operates subsidiary depository institutions in North Carolina and South Carolina. 4
CCB Bank is the seventh largest depository institution in
North Carolina, controlling deposits of $5.5 billion, representing approximately 5.4 percent of total deposits in depository institutions in the state.
After consummation of the proposal, National Commerce would b e c o m e the 62nd largest commercial banking
organization in the United States, with total consolidated
assets of $15 billion, representing less than 1 percent of
total banking assets. National Commerce would control the
1. Under the proposal, National Commerce would merge with CCB
Financial, with National Commerce as the surviving corporation.
National Commerce also has requested the Board's approval to hold
and exercise an option to acquire up to 19.9 percent of CCB Financial's voting shares. This option would expire on consummation of the
proposed merger.
2. All asset data are as of December 31, 1999, and all deposit data
areas of June 30, 1999.
3. In this context, depository institutions include commercial banks,
savings banks, and savings associations.
4. American Federal Bank, F.S.B., Greenville, South Carolina, a
subsidiary of CCB Financial, would be merged into CCB Bank before
consummation of the proposal.
598
Federal Reserve Bulletin • August 2000
seventh largest depository institution in North Carolina,
with deposits of $5.9 billion, representing approximately
5.8 percent of total deposits in depository institutions in the
state.
Interstate
Analysis
Section 3(d) of the BHC Act allows the Board to approve
an application by a bank holding company to acquire
control of a bank located in a state other than the home
state of such bank holding company if certain conditions
are met. 5 For purposes of the BHC Act, the home state of
National Commerce is Tennessee, and National Commerce
proposes to acquire CCB Bank, which is located in North
Carolina and South Carolina. All the conditions for an
interstate acquisition enumerated in section 3(d) are met in
this case. 6 In light of all the facts of record, the Board is
permitted to approve the proposal under section 3(d) of the
BHC Act.
Competitive
Factors
Section 3 of the BHC Act prohibits the Board from approving a proposal that would result in a monopoly or be in
furtherance of a monopoly. Section 3 also prohibits the
Board from approving a proposal that would substantially
lessen competition in any relevant banking market unless
the anticompetitive eifects of the proposal in that banking
market are clearly outweighed in the public interest by the
probable effect of the proposal in meeting the convenience
and needs of the community to be served. 7
National Commerce and CCB Financial compete directly in the Greensboro-High Point, Raleigh, and Durham
banking markets, all in North Carolina. 8 The Board has
carefully reviewed the competitive eifects of the proposal
in e a c h o f t h e s e b a n k i n g m a r k e t s in light o f all the f a c t s o f
record, including the number of competitors that would
remain, the share of total deposits in depository institutions
5. See 12 U.S.C. § 1842(d). A bank holding company's home state
is the state in which the total deposits of all banking subsidiaries of
such company were the largest on July 1, 1966, or the date on which
the company became a bank holding company, whichever is later.
12 U.S.C. § 1841(o)(4)(C).
6. 12 U.S.C. §§ 1842(d)(1)(A) and (B) and 1842(d)(2)(A) and (B).
National Commerce meets the capital and managerial requirements
established under applicable law. On consummation, National Commerce would control less than 10 percent of the total amount of
deposits of insured depository institutions in the United States and less
than 30 percent of total deposits held by insured depository institutions in North Carolina, the state in which National Commerce and
CCB Financial both operate insured depository institutions. All other
requirements under section 3(d) of the BHC Act, including applicable
state age limitations, would be met on consummation of the proposal.
7. See 12 U.S.C. § 1842(c).
8. The Greensboro-High Point banking market is defined as the
Greensboro-Highpoint Ranally Metropolitan Area ("RMA") and the
non-RMA portions of Davidson and Randolph Counties. The Raleigh
banking market is defined as the Raleigh RMA, and the non-RMA
portions of Franklin, Johnston, Wake, and Harnett Counties. The
Durham banking market is defined as the Durham RMA and the
non-RMA portions of Durham, Orange, and Chatham Counties.
("market deposits") controlled by each competitor in the
markets, 9 the concentration level of market deposits and
the increase in this level as measured by the HerfindahlHirschman Index ("HHI"), 1 0 attractiveness for entry, and
other characteristics.
Consummation of the proposal would be consistent with
Board precedent and the DO J Guidelines in the
Greensboro-High Point and Raleigh banking markets. 11
Each of these banking markets would remain moderately
concentrated after consummation of the proposal and numerous competitors would remain in each market relative
to the size of the market.
Consummation of the proposal in the Durham banking
market would exceed the DOJ Guidelines as measured by
the HHI. National Commerce controls the seventh largest
depository institution in the Durham banking market, controlling deposits of $146.8 million, representing approximately 3.7 percent of market deposits. CCB Financial
controls the largest depository institution in the Durham
banking market, controlling deposits of $1.3 billion, representing approximately 33.5 percent of market deposits. On
consummation of the proposal, National Commerce would
control the largest depository institution in the Durham
banking market, with approximately $1.5 billion of deposits, representing 37.2 percent of market deposits. Concentration in the market, as measured by the HHI, would
increase 246 points to 2055.
In evaluating the competitive effects of the proposal in
the Durham banking market, the Board has considered
several factors. After consummation of the proposal, 15
depository institutions would remain in the market, including six other multistate bank holding companies. Three of
these multistate bank holding companies would each control over 10 percent of market deposits and two other
multistate bank holding companies would each control
over 5 percent of market deposits. In addition, the attractiveness for entry into the Durham banking market is
9. Market share data are based on calculations that include the
deposits of thrift institutions, which include savings banks and savings
associations, weighted at 50 percent. The Board previously has indicated that thrift institutions have become, or have the potential to
become, significant competitors of commercial banks. See, e.g., Midwest Financial Group, 75 Federal Reserve Bulletin 386 (1989); National City Corporation, 70 Federal Reserve Bulletin 743 (1984).
Thus, the Board regularly has included thrift deposits in the calculation of market share on a 50-percent weighted basis. See, e.g., First
Hawaiian, Inc., 11 Federal Reserve Bulletin 52 (1991).
10. Under the Department of Justice Merger Guidelines ("DOJ
Guidelines"), 49 Federal Register 26,923 (June 29, 1984), a market in
which the post-merger HHI is more than 1800 is considered to be
highly concentrated. The Department of Justice has informed the
Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors indicating anticompetitive
effects) unless the post-merger HHI is at least 1800 and the merger
increases the HHI by more than 200 points. The Department of Justice
has stated that the higher than normal HHI thresholds for screening
bank mergers for anticompetitive effects implicitly recognize the
competitive effects of limited-purpose lenders and other nondepository financial institutions.
11. The competitive effects of the proposal in these banking markets
are summarized in the Appendix.
Legal Developments
demonstrated by the entry of two depository institutions
into the banking market since 1999, one through de novo
entry and one by acquisition.
The Department of Justice has reviewed the proposal,
including its effect on competition in the Durham banking
market, and advised the Board that consummation of the
proposal would not likely have a significantly adverse
competitive effect in any banking market. The Office of the
Comptroller of the Currency ("OCC") and the Federal
Deposit Insurance Corporation ("FDIC") have been afforded an opportunity to comment and have not objected to
consummation of the proposal.
Based on these and all other facts of record, the Board
concludes that consummation of the proposal would not
result in any significantly adverse effects on competition or
on the concentration of banking resources in the Durham
banking market. For the reasons explained above, the
Board also has concluded that consummation of the proposal would not likely have a significantly adverse effect
on competition or on the concentration of banking resources in the other banking markets in which National
Commerce and CCB Financial both compete or any other
relevant banking market.
Financial, Managerial,
and Other Supervisory
Factors
Section 3 of the BHC Act also requires that the Board
consider the financial and managerial resources and future
prospects of the companies and banks involved in a proposal and certain other supervisory factors. The Board has
carefully considered the financial and managerial resources
and future prospects of National Commerce, CCB Financial, and their respective subsidiary banks and other supervisory factors in light of all the facts of record, including
reports of examination, other confidential supervisory information assessing the financial and managerial resources
of the organizations, and financial information provided by
National Commerce. The Board notes that National Commerce and CCB Financial and their subsidiary depository
institutions currently are well capitalized and are expected
to remain so on consummation of the proposal. Based on
these and all other facts of record, the Board concludes that
the financial and managerial resources and future prospects
of National Commerce, CCB Financial, and their subsidiary banks are consistent with approval, as are the other
supervisory factors that the Board must consider under
section 3 of the BHC Act.
Convenience
and Needs
Factor
In acting on a proposal under section 3 of the BHC Act, the
Board is required to consider the effect of the proposal on
the convenience and needs of the communities to be
served. The Board has long held that consideration of the
convenience and needs factor includes a review of the
records of the relevant depository institutions under the
Community Reinvestment Act (12 U.S.C. § 2901 et seq.)
("CRA"). Accordingly, the Board has carefully considered
the effect of the proposed merger on the convenience and
599
needs of the communities to be served and the CRA
records of performance of the institutions involved in light
of all the facts of record. 12
As provided in the CRA, the Board has evaluated the
convenience and needs factor in light of examinations of
the CRA performance records of the relevant depository
institutions by the appropriate federal financial supervisory
agency. 13 National Bank of Commerce, the lead depository
institution of National Commerce, received a "satisfactory" rating at its most recent CRA performance examination by the OCC, as of July 1998. 14 CCB Bank received a
"satisfactory" rating at its most recent CRA performance
examination by the FDIC, as of January 2000. 1 5
12. The Board received one letter filed after the close of the
comment period on the application from thirteen community organizations and churches in North Carolina. The letter included comments
on the record of mortgage and community development lending to
low- and moderate-income ("LMI") and minority borrowers of National Commerce's subsidiary depository institutions and the lack of
branches of National Bank of Commerce, Memphis, Tennessee, in
LMI areas. In addition, the letter included comments on the level of
qualified investments made by the subsidiary depository institutions
of National Commerce and CCB Financial and the impact of the loss
of CCB Financial's corporate headquarters in North Carolina. The
letter also commented on the possible loss of jobs resulting from
consummation of the proposal and concerns about the promotion of
minority employees and use of minority vendors by National Commerce and CCB Financial. Several of these comments relate to factors
that are not within the statutory factors that the Board is permitted to
consider under section 3 of the BHC Act. See, e.g., First Security
Corporation, 86 Federal Reserve Bulletin 122, 132 n.56 (2000);
Community Capital Bancshares, Inc., 85 Federal Reserve Bulletin
444, 445 n.3 (1999). A public meeting or hearing on the proposal was
also requested. Section 3 of the BHC Act requires the Board to hold a
public hearing on an application only on a timely written recommendation of denial from the appropriate supervisory authority for the
bank to be acquired. The Board has not received such a recommendation in this case. The Board has accumulated a significant record on
the proposal, including reports of examination, supervisory information, and public reports and information. In light of the record accumulated and based on all the facts of record, the Board has determined
that a public meeting or hearing is not required or otherwise warranted
in this case.
13. The Interagency Questions and Answers Regarding Community
Reinvestment provides that an institution's most recent CRA performance evaluation is an important and often controlling factor in the
consideration of an institution's CRA record because it represents a
detailed evaluation of the institution's overall record of performance
under the CRA by its appropriate federal banking supervisor.
64 Federal Register 23,618 and 23,641 (1999).
14. The other subsidiary depository institutions of National Commerce also have received "satisfactory" ratings at their most recent
CRA performance examinations. NBC Bank, FSB, Memphis, Tennessee, received a "satisfactory" rating from the Office of Thrift Supervision ("OTS"), as of July 1998; First Market Bank, FSB, Memphis,
Tennessee, received a "satisfactory" rating from the OTS, as of July
1998; and Hillsborough Savings Bank, Inc., SSB, Hillsborough, North
Carolina, which National Commerce acquired on April 11, 2000,
received a "satisfactory" rating from the Federal Deposit Insurance
Corporation, as of August 1998. NBC Bank, FSB, Knoxville, Tennessee ("NBC-Knoxville"), which was merged into National Bank of
Commerce on May 9, 2000, received a "satisfactory" rating from the
OTS, as of July 1998.
15. American Federal Bank received a "satisfactory" rating from
the OTS at its most recent CRA performance examination, as of
August 1999.
600
Federal Reserve Bulletin • August 2000
National Commerce has indicated that CCB Bank would
continue in operation after consummation of the proposal
and that National Commerce would use the strengths of the
C R A programs of National Commerce and CCB Financial
at all of its subsidiary depository institutions. Consequently, the Board has considered the C R A performance
records of the subsidiary depository institutions of National
Commerce and CCB Financial in evaluating the proposal.
Examiners at the most recent C R A performance examination of National Bank of Commerce indicated that the
residential real estate lending and small business lending of
the bank reflected a reasonable penetration in LMI geographies and an adequate distribution of loans to LMI borrowers that were reportable under the Home Mortgage Disclosure Act. 1 6 Examiners favorably noted two flexible lending
programs designed to deliver real estate loans to LMI
individuals. The affordable mortgage program offers mortgages that feature lower downpayments and flexible debt
ratios to qualified borrowers. During the evaluation period,
the bank made 5 0 loans totaling $2.5 million under this
program. The first mortgage refinance program offers mortgages with lower downpayments, flexible loan-to-value
ratios, no application or origination fees, and no private
mortgage insurance to qualified borrowers. B e t w e e n February 1998 and June 1998, the bank made 192 loans under
this program totaling $17 million. 1 7
In addition, examiners indicated that National Bank of
Commerce made qualified community development loans
totaling $4.9 million during the evaluation period to provide affordable housing to LMI individuals. Examiners
also indicated that National Bank of Commerce made an
adequate number of qualified investments in its assessment
areas during the examination period. Examiners stated that
the bank's delivery of retail banking services was reasonably accessible to LMI individuals through the bank's
branch network in grocery stores. Examiners also indicated
that a fair lending examination was conducted concurrently
with the C R A performance examination and did not detect
any evidence of discriminatory or other illegal credit practices.
Examiners at the most recent C R A performance examination of CCB Bank stated that the bank responded well to
community credit needs as evidenced by the level of lending inside the bank's assessment area. CCB Bank originated 87 percent of its mortgage loans and 89 percent of
the dollar volume of mortgage loans in its assessment areas
in 1998 and 1999. Examiners indicated that CCB Bank
demonstrated good geographic distribution of lending
throughout its assessment areas and had a good distribution
of loans to borrowers with different incomes. Examiners
also commended the bank for offering innovative or flexible lending programs, including flexible mortgage programs. In 1998 and 1999, CCB Bank made 4,621 loans
under these programs totaling $401 million.
Examiners favorably noted that CCB Bank made 163
community development loans totaling $21 million in 1998
and 1999. Examiners also indicated that the bank made a
significant level of community development investments,
including making more than $ 5 0 0 , 0 0 0 in qualified donations to LMI individuals and families in its assessment
areas. Examiners described CCB Bank's delivery of retail
banking services as outstanding. In connection with the
CRA performance evaluation, examiners noted that the
current compliance examination of CCB Bank did not
reveal any substantive violations of the fair lending laws
and regulations.
In its review of the convenience and needs factor under
the B H C Act, the Board has carefully considered the entire
record. Based on all the facts of record, the Board concludes that considerations relating to the convenience and
needs factor, including the C R A performance records of
the relevant insured depository institutions, are consistent
with approval of the proposal.
Conclusion
Based on the foregoing, and in light of all the facts of
record, the Board has determined that the application
should be, and hereby is, approved. The Board's approval
is specifically conditioned on compliance by National
Commerce with all the commitments made in connection
with the application and on the receipt by National Commerce of all necessary approvals from state regulators. For
purposes of this action, the commitments and conditions
relied on by the Board in reaching its decision are deemed
to be conditions imposed in writing by the Board in connection with its findings and decision and, as such, may be
enforced in proceedings under applicable law.
The acquisition of CCB Financial shall not be consummated before the fifteenth calendar day following the effective date of this order, or later than three months after the
effective date of this order, unless such period is extended
for good cause by the Board or by the Federal Reserve
Bank of St. Louis, acting pursuant to delegated authority.
By order of the Board of Governors, effective June 19,
2000.
Voting for this action: Chairman Greenspan, Vice Chairman Ferguson, and Governors Kelley, Meyer, and Gramlich.
ROBERT DEV. FRIERSON
16. The 1998 examination of National Bank of Commerce reviewed
the bank's activities from July 31, 1996, through June 30, 1998.
During this period, the bank's assessment area consisted of portions of
the Memphis and Jackson Metropolitan Statistical Areas and portions
of Bradley County, all in Tennessee.
17. NBC-Knoxville operated branches in Tennessee, North Carolina, Mississippi, and Georgia. Examiners noted that the lending
activity of NBC-Knoxville reflected an adequate responsiveness to the
credit needs of the bank's assessment areas.
Associate
Secretary
of the
Board
Appendix
Summary of Market Structure
Greensboro-High Point: National Commerce is the 17th
largest depository institution in the market, controlling
deposits of $51.9 million, representing approximately
Legal Developments
less than 1 percent of market deposits. CCB Financial is
the third largest depository institution in the market,
controlling deposits of $831.6 million, representing approximately 10.1 percent of market deposits. After the
proposed merger, National Commerce would become
the third largest depository institution in the market,
controlling deposits of $883.4 million, representing approximately 10.7 percent of market deposits. The HHI
would increase 13 points to 1130 and 24 other competitors would remain in the market.
Raleigh: National Commerce is the tenth largest depository
institution in the market, controlling deposits of $128.8
million, representing approximately 1.6 percent of market deposits. CCB Financial is the sixth largest depository institution in the market, controlling deposits of
$659.3 million, representing approximately 8.1 percent
of market deposits. After the proposed merger, National
Commerce would become the sixth largest depository
institution in the market, controlling deposits of approximately $788.1 million, representing approximately 9.7
percent of market deposits. The HHI would increase 26
points to 1251 and 21 other competitors would remain
in the market.
Popular,
Inc.
Hato Rey, Puerto
Rico
Popular International
Bank
Hato Rey, Puerto
Rico
Popular North America,
Inc.
Mount Laurel, New
Jersey
Banco Popular, National
Orlando,
Florida
Association
Order Approving the Acquisition of a Bank and
Establishment of a Branch and an Agreement
Corporation
Popular, Inc., Popular International Bank, and Popular
North America, Inc., (collectively "Popular"), bank holding companies within the meaning of the Bank Holding
Company Act ("BHC Act"), have requested the Board's
approval under section 3 of the BHC Act (12 U.S.C.
§ 1842) to acquire Banco Popular, National Association,
Orlando, Florida ("Bank"), a de novo national bank.
Bank also has applied under section 211.4 of Regulation K (12 C.F.R. 211.4) to establish an agreement corporation under section 25 of the Federal Reserve Act (12 U.S.C.
§§ 601-604a) ("FRA"). In addition, Bank has applied
under section 25 of the FRA and section 211.3 of Regulation K (12 C.F.R. 211.3) to establish a foreign branch in
Culebra, Puerto Rico.
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published
(64 Federal Register 47,191 (1999)). The time for filing
comments has expired, and the Board has considered the
601
proposal and all comments received in light of the factors
set forth in the FRA and the BHC Act.
Popular, with total consolidated assets of $25.5 billion is
the 35th largest commercial banking organization in the
United States, controlling less than 1 percent of total assets
of insured commercial banks in the United States. 1 Popular
operates depository institutions and branches in California,
Florida, Illinois, N e w York, N e w Jersey, Texas, Puerto
Rico, the U.S. Virgin Islands, and the British Virgin Islands. Popular is the 126th largest commercial banking
organization in Florida, controlling deposits of $114.1 million, representing less than 1 percent of total deposits in
depository institutions in the state. 2 Bank's de novo entry
into the Orlando, Florida, banking market would enhance
competition in that market. 3 Based on all the facts of
record, the Board concludes that consummation of the
proposal would not have a significantly adverse effect on
competition or on the concentration of banking resources
in any relevant banking market and that competitive considerations are consistent with approval.
Section 3(d) of the BHC Act allows the Board to approve an application by a bank holding company to acquire
control of a bank located in a state other than the home
state of the bank holding company if certain conditions are
met. 4 For purposes of the BHC Act, the home state of
Popular is N e w York, and Bank would be located in
Florida. All the conditions for an interstate acquisition
enumerated in section 3(d) of the BHC Act are met in this
case. 5 In view of all the facts of record, the Board is
permitted to approve the proposal under section 3(d) of the
BHC Act.
The Board has carefully considered the financial and
managerial resources and future prospects of Popular and
Bank and other supervisory factors, in light of all the facts
of record. As part of this consideration, the Board has
reviewed relevant reports of examination and other super-
1. Asset and ranking data are as of December 31, 1999.
2. Deposit data are as of June 30, 1999. In this context, depository
institutions include commercial banks, savings banks, and savings
associations.
3. The Orlando, Florida, banking market is defined as Orange,
Osceola, and Seminole Counties; the Western half of Volusia County;
and the towns of Clermont and Groveland in Lake County.
4. See 12 U.S.C. § 1842(d). A bank holding company's home state
is that state in which the total deposits of all banking subsidiaries of
the company were the largest on July 1, 1966, or on the date on which
the company became a bank holding company, whichever is later.
12 U.S.C. § 1841(o)(4)(C).
5. See 12 U.S.C. §§ 1842(d)(1)(A) and (B) and 1842(d)(2)(A).
Popular is adequately capitalized and adequately managed, as defined
in the BHC Act. Popular has operated banking offices in Florida since
1997, and the Florida Department of Banking and Finance has indicated that this transaction would comply with applicable Florida law.
See Fla. Stat. Ann. § 658.295 (West 1999). See also Letter from
Richard T. Donelan, Chief Banking Counsel, Department of Banking
and Finance, State of Florida, to Donald J. Toumey, Esq., counsel for
Popular (September 14, 1999). On consummation of the proposal,
Popular would control less than 10 percent of the total amount of
deposits in insured depository institutions in the United States. All
other requirements of section 3(d) of the BHC Act also would be met
on consummation of the proposal.
602
Federal Reserve Bulletin • August 2000
visory information prepared by the Federal Reserve Bank
of N e w York and other federal banking supervisory agencies, including Popular's compliance with the Currency
and Foreign Transactions Reporting Act and related regulations. 6
The Board also has considered other aspects of the
financial condition and resources of Popular and other
aspects of their managerial resources. The Board notes that
the bank holding companies and their subsidiary banks are
well capitalized and are expected to remain so after consummation of the proposal. Based on all the facts of
record, the Board concludes that considerations relating to
the financial and managerial resources and future prospects
of Popular, and its subsidiaries are consistent with approval
of the proposal.
Considerations relating to the convenience and needs of
the community, including the performance records of Popular's subsidiary banks under the Community Reinvestment Act ("CRA") (12 U.S.C. § 2901 et seq.), and other
supervisory factors that the Board must consider under
section 3 of the BHC Act also are consistent with approval.
Bank has applied to establish Popular Insurance, Inc.
("PII"), an agreement corporation under section 25 of the
FRA. Based on all the facts of record, the Board concludes
that the financial and managerial resources of Popular are
consistent with the establishment of this corporation. Accordingly, the Board finds that the establishment of PII by
Popular is consistent with the FRA and Regulation K.
Bank also has applied pursuant to section 25 of the FRA
and section 211.3 of Regulation K (12 C.F.R. 211.3) to
establish a branch in Culebra, Puerto Rico. The Board has
concluded, based on all the facts of record, that the financial and managerial resources and future prospects of the
institutions involved as well as other factors it is required
to consider when reviewing an application to establish a
b r a n c h u n d e r s e c t i o n 2 5 o f the F R A are c o n s i s t e n t w i t h
approval.
Based on the foregoing, and in light of all the facts of
record, the Board has determined that the applications
should be, and hereby are, approved. Approval of the
applications is specifically conditioned on compliance by
Popular with all the commitments made in connection with
the proposal and with the conditions stated or referred to in
this order.
6. 31 U.S.C. § 5311 et seq. On March 9, 2000, Popular's subsidiary
bank, Banco Popular de Puerto Rico, Hato Rey, Puerto Rico ("Banco
Popular"), entered into a written agreement (the "Written Agreement"), pursuant to section 8 of the Federal Deposit Insurance Act
(12 U.S.C. § 1818), to address the deficiencies in its anti-money
laundering programs. See Written Agreements Approved by Federal
Reserve Banks, 86 Federal Reserve Bulletin 351 (2000). In response
to the Written Agreement, Banco Popular, with the assistance of
independent auditors, conducted a review of its anti-money laundering
policies and submitted a report to the Board on the adequacy of its
procedures and a plan designed to ensure full compliance with all
applicable anti-money laundering laws and regulations. In reviewing
this proposal, the Board has considered this report and the steps
already taken by Banco Popular to ensure compliance with antimoney laundering laws and the Written Agreement and will continue
to monitor Banco Popular's ongoing efforts in this area.
The acquisition of Bank shall not be consummated before the fifteenth calendar day after the effective date of
this order, or later than three months after the effective date
of this order, and Bank shall be open for business within
six months after the effective date of this order, unless such
period is extended for good cause by the Board or by the
Federal Reserve Bank of N e w York, acting pursuant to
delegated authority.
By order of the Board of Governors, effective June 5,
2000.
Voting for this action: Chairman Greenspan and Governors Kelley,
Meyer, and Gramlich. Absent and not voting: Vice Chairman Ferguson.
ROBERT DEV. FRIERSON
Associate
Secretary of the Board-
Wells Fargo & Company
San Francisco, California
Order Approving Acquisition of a Bank Holding
Company
Wells Fargo & Company ("Wells Fargo"), a bank holding
company within the meaning of the Bank Holding Company Act ("BHC Act"), has requested the Board's approval under section 3 of the BHC Act (12 U.S.C. § 1842)
to acquire all the voting shares of National Bancorp of
Alaska ("National Bancorp") and thereby acquire National
Bank of Alaska ("Alaska Bank"), both of Anchorage,
Alaska.
Notice of the proposal, affording interested persons an
opportunity to submit comments, has been published
(65 Federal Register 20,168 (2000)). The time for filing
comments has expired, and the Board has considered the
proposal and all comments received in light of the factors
set forth in section 3 of the BHC Act.
Wells Fargo, with total consolidated assets of approximately $222 billion, is the seventh largest commercial
banking organization in the United States. 1 Wells Fargo
operates a large network of banking and nonbanking subsidiaries and operates banks in 21 western and midwestern
states, but does not have a subsidiary bank in Alaska.
National Bancorp, with total consolidated assets of approximately $3 billion, operates in the States of Alaska and
Washington. National Bancorp is the largest banking organization in Alaska, controlling deposits of $2.1 billion,
representing approximately 45.2 percent of total deposits
in depository institutions in the state ("state deposits"). 2
On consummation of the proposal, Wells Fargo would
become the largest banking organization in Alaska.
In the State of Washington, Wells Fargo is the fifth
largest banking organization, controlling deposits of
1. Asset and ranking data are as of March 31, 2000.
2. Deposit data are as of June 30, 1999. In this context, depository
institutions include commercial banks, savings banks, and savings
associations.
Legal Developments
$2 billion, representing approximately 3.4 percent of state
deposits. National Bancorp is the 103rd largest banking
organization, controlling $2 million in deposits, representing less than 1 percent of state deposits. On consummation
of the proposal, Wells Fargo would remain the fifth largest
banking organization in the state.
Interstate
Analysis
Section 3(d) of the BHC Act allows the Board to approve
an application by a bank holding company to acquire
control of a bank located in a state other than the home
state of such bank holding company provided that certain
conditions are met. 3 For purposes of the BHC Act, the
home state of Wells Fargo is California, and Wells Fargo
proposes to acquire a bank in Alaska that operates a branch
in the State of Washington. 4 All the conditions for an
interstate acquisition enumerated in section 3(d) are met in
this case. 5 In light of all the facts of record, the Board is
permitted to approve the proposal under section 3(d) of the
BHC Act.
Competitive
Considerations
The BHC Act prohibits the Board from approving an
application under section 3 of the BHC Act if the proposal
would result in a monopoly or would be in furtherance of
any attempt to monopolize the business of banking. The
BHC Act also prohibits the Board from approving a proposed combination that would substantially lessen competition or tend to create a monopoly in any relevant banking
market, unless the Board finds that the anticompetitive
effects of the proposal are clearly outweighed in the public
interest by the probable effects of the proposal in meeting
the convenience and needs of the community to be served. 6
Wells Fargo and National Bancorp own depository institutions that compete directly in the Seattle, Washington,
3. A bank holding company's home state is that state in which the
total deposits of all banking subsidiaries of such company were the
largest on July 1, 1966, or on the date on which the company became
a bank holding company, whichever is later. 12 U.S.C.
§ 1841(o)(4)(C).
4. For purposes of section 3(d), the Board considers a bank to be
located in the states in which the bank is chartered or headquartered or
operates a branch. See 12 U.S.C. §§ 1841(o)(4)-(7) and 1842(d)(1)(A)
and (d)(2)(B).
5. See 12 U.S.C. §§ 1842(d)(1)(A) and (B) and 1842(d)(2)(A) and
(B). Wells Fargo is adequately capitalized and adequately managed, as
defined by applicable law. Alaska Bank has been in existence and
operated continuously for the minimum period of time required under
applicable state law. See Alaska Stat. Ann. § 06.05.570 (Lexis 2000)
(three years). On consummation of the proposal, Wells Fargo would
control less than 10 percent of the total amount of deposits of insured
depository institutions in the United States and less than 30 percent of
total deposits held by insured depository institutions in Washington,
where Wells Fargo and National Bancorp both operate branches of
insured depository institutions. All other requirements under section
3(d) of the BHC Act would be met on consummation of the proposal.
6. 12 U.S.C. § 1842(c).
603
banking market ("Seattle banking market"). 7 Wells Fargo
is the fifth largest depository institution in the Seattle
banking market, controlling deposits of $1.5 billion, representing approximately 4.9 percent of total deposits of depository institutions in the market ("market deposits"). 8
National Bancorp is the 55th largest depository institution
in the market, controlling deposits of $2 million, representing less than 1 percent of market deposits. On consummation of the proposal, Wells Fargo would remain the fifth
largest depository institution in the Seattle banking market,
controlling deposits of $1.5 billion, representing approximately 4.9 percent of market deposits. The concentration
of market deposits in the market, as measured by the
Herfindahl-Hirschman Index ("HHI") would remain unchanged at 1675 and would be consistent with approval
under the Department of Justice Merger Guidelines ("DOJ
Guidelines") and the Board's precedent. 9
Several commenters asserted that Wells Fargo's acquisition of National Bancorp would have an adverse effect on
competition in home mortgage and consumer finance lending in Alaska, because several nondepository institution
affiliates of Wells Fargo provide these products in Alaska.
The Board concludes that this contention does not accurately reflect the competitive effects of a proposal by a
banking organization to acquire a bank. As stated previously by the Board, the appropriate product market for
analyzing the competitive effects of a proposal to acquire a
bank is the complete cluster of banking products and
services provided by banks, and not submarkets for individual products or services. 10 On this basis, and for the
reasons discussed above, the Board concludes that this
7. The Seattle banking market is defined as the Seattle-Tacoma
Ranally Metropolitan Area and the towns of Camano City and Eatonville, Washington.
8. Market share data are as of June 30, 1999.
9. Under the DOJ Guidelines, 49 Federal Register 26,823 (June 29,
1984), a market in which the post-merger HHI is more than 1000 and
less than 1800 is considered to be moderately concentrated. The
Department of Justice has informed the Board that a bank merger or
acquisition generally will not be challenged (in the absence of other
factors indicating anticompetitive effects) unless the post-merger HHI
is at least 1800 and the merger increases the HHI by more than 200
points. The Department of Justice has stated that the higher than
normal HHI thresholds for screening bank mergers for anticompetitive effects implicitly recognize the competitive effects of limitedpurpose lenders and other nondepository financial entities.
10. For bank mergers and acquisitions, the Board and the courts
have recognized consistently that the appropriate product market for
analyzing the competitive effects of a transaction is the cluster of
products (various kinds of credit) and services (such as checking
accounts and trust administration) offered by banking institutions. See
Chemical Banking Corporation, 82 Federal Reserve Bulletin 239
(1996); United States v. Philadelphia National Bank, 374 U.S. 321,
357 (1963). According to the Supreme Court, the clustering of banking products and services facilitates convenient access to these products and services and vests the cluster with economic significance
beyond the individual products and services that constitute the cluster.
See United States v. Phillipsburg National Bank, 399 U.S. 350, 361
(1969). Several studies support the conclusion that households continue to seek this cluster of services. See Elliehausen and Wolken,
Banking Markets and the Use of Financial Services by Households,
78 Federal Reserve Bulletin 169 (1992).
604
Federal Reserve Bulletin • August 2000
proposal would not have a significantly adverse effect on
competition in any relevant banking market.
The Board also has considered that, even under the
framework suggested by the commenters, the level of
market share, number of competitors, and characteristics of
the home mortgage and consumer finance lending markets
indicate that the proposal would not likely have a significantly adverse effect on competition in either of these
markets. An analysis of these factors is included in the
Appendix.
Convenience
and Needs
Considerations
In acting on a proposal under section 3 of the BHC Act, the
Board is required to consider the effect of the proposal on
the convenience and needs of the community to be served
and take into account the records of the relevant depository
institutions under the Community Reinvestment Act
("CRA"). 11 The CRA requires the federal financial supervisory authorities to encourage financial institutions to help
meet the credit needs of local communities in which they
operate, consistent with their safe and sound operation, and
requires the appropriate federal supervisory authority to
take into account an institution's record of meeting the
credit needs of its entire community, including low- and
moderate-income ("LMI") neighborhoods, in evaluating
bank expansion proposals. The Board has carefully considered the convenience and needs factor and the CRA performance records of the subsidiary depository institutions of
Wells Fargo and National Bancorp in light of all the facts
of record, including public comments on the proposal.
Comments on the proposal were submitted by several
community groups and individuals. Some commenters expressed concern that Wells Fargo would close branches and
fail to provide adequate service to National Bancorp's
customers in sparsely populated or remote areas of Alaska,
including Alaskan Native communities. Other commenters
questioned whether Wells Fargo's experience serving rural
areas and Native American reservations elsewhere in the
United States prepared it to address the unique banking
needs of residents of remote areas of Alaska. 12
Several commenters also asserted, based in part on their
analyses of data filed under the Home Mortgage Disclosure
Act ("HMDA"), 1 3 that Wells Fargo's record of housingrelated lending inside and outside Alaska indicated disparities between the organization's treatment of white and
minority loan applicants, including the origination of
subprime loans. 14 These commenters alleged that Wells
Fargo and, to a lesser extent, National Bancorp, have
11. 12 U.S.C. § 2 9 0 1 etseq.
12. One commenter criticized NBA for its alleged practice of
requiring collateral in excess of the loan amount when securing loans
in remote communities. Wells Fargo has indicated that it is investigating the allegations, that its own collateral requirements apply uniformly in urban and rural areas, and that it regularly extends credit to
isolated tribal borrowers without such a requirement.
13. 12 U.S.C. § 2801 et seq.
14. Wells Fargo also was criticized for its association as bond
indenture trustee for certain unaffiliated subprime lenders. Wells Fargo
inadequate records of meeting the banking and credit needs
of the communities they serve. 15
A. CRA Performance Examinations
As provided in the CRA, the Board has evaluated the
records of Wells Fargo and National Bancorp in serving the
convenience and needs of their communities in light of
examinations by the appropriate federal supervisors of the
CRA performance records of their respective subsidiary
depository institutions. An institution's most recent CRA
performance review is a particularly important consideration in the applications process because it represents a
detailed on-site evaluation of the institution's overall
record of performance under the CRA by the appropriate
federal supervisory agency. 16 Wells Fargo's lead bank,
Wells Fargo Bank, NA, San Francisco, California ("Wells
Fargo Bank"), received an "outstanding" rating in its most
recent CRA examination by its primary federal banking
supervisory agency, the Office of the Comptroller of the
Currency ("OCC"), as of June 8, 1998. 17 National Bancorp's only bank subsidiary, Alaska Bank, also received an
"outstanding" rating in its most recent CRA examination
by the OCC, as of March 8, 1999.
Wells Fargo has stated that it would adopt and continue
all of Alaska Bank's CRA programs designed to meet the
credit needs of rural Alaskans. Wells Fargo also has represented that, after a transition period, it would apply its own
marketing program, which includes initiatives for meeting
the convenience and needs of the communities it serves, to
Alaska Bank.
1. CRA Performance Record of Wells Fargo Bank Lending
Test. Wells Fargo Bank received an examination rating of
"outstanding" for its lending activities. Examiners stated
that the bank's lending record was strong and based on
innovative underwriting of small business loans that enabled it to penetrate most segments of the small business
community, an excellent level of community development
lending, and good penetration in LMI communities and
among LMI borrowers. During the review period, which
included 1996, 1997, and the first quarter of 1998, Wells
Fargo Bank made approximately 239,000 small business
has stated that as trustee it has no knowledge of or control over the
credit criteria of the bond issuer.
15. According to some commenters, Wells Fargo and National
Bancorp improperly excluded Alaskan Natives in their conventional
housing-related lending.
16. The Interagency Questions and Answers Regarding Community
Reinvestment (64 Federal Register 23,641 (1999)) provides that a
CRA examination is an important and often controlling factor in the
consideration of an institution's CRA record.
17. Wells Fargo Bank operates in California, where it derives
81 percent of its deposits, and eight other western states. The bank
accounts for 45 percent of the total consolidated assets of Wells Fargo.
As of March 31, 2000, Wells Fargo subsidiary banks with "outstanding" ratings in their most recent CRA examinations accounted for
84 percent of the organization's total consolidated assets.
Legal Developments
loans, totaling $9.3 billion. 18 Ninety-two percent of these
loans were in amounts less than $100,000, with an average
loan amount of $39,000, and 26 percent were made to
businesses located in LMI census tracts. The bank originated 149 community development loans, totaling approximately $651 million. Wells Fargo Bank made 6,862 residential mortgage loans, or 36 percent of all such loans it
made, totaling $240 million, to LMI borrowers. In the
aggregate, the bank made 25 percent by number and 27
percent by dollar amount of its small business, community
development, and residential mortgage loans in LMI census tracts.
Examiners found that Wells Fargo Bank had a strong
lending record in California, the bank's primary geographic market, based on a large volume of community
development lending to support low-income and very lowincome housing development and a large volume of small
business loans in LMI areas. In California, the bank originated 99 community development loans, totaling $469
million, including 64 loans to affordable housing projects
to create more than 4,300 LMI housing units. 19 The bank
also made more than 198,000 small business loans, totaling
approximately $8 billion, in the state. Wells Fargo Bank's
market share of small business loans in LMI areas exceeded its market share of small business loans in its
assessment area overall, and the bank made a larger proportion of its small business loans in LMI areas than the
proportion of small businesses in its assessment area to be
found in LMI areas. 20
The examination report also stated that, for more than
ten years, Wells Fargo Bank has provided financing, including complex arrangements using low-income housing
tax credits ("LIHTC"), for affordable housing projects. 21
Examiners commended Wells Fargo Bank for its assistance
to these transactions and also cited the volume and complexity of financing packages in which Wells Fargo Bank
participated.
Examiners also commented favorably on Wells Fargo
Bank's record of innovation in small business lending.
During the review period, Wells Fargo Bank developed
new loan products, including a low-documentation small
business loan, and marketing programs focused on underserved groups of small business customers, including
18. In this context, "small business loans" means loans in amounts
less than $1 million. Wells Fargo Bank also made 33 percent of its
small business loans to businesses with gross annual revenues less
than $1 million ("loans to small businesses").
19. In rural areas, Wells Fargo Bank provided $7.3 million of
construction financing for 81 affordable single-family housing units in
a very low-income community of farm workers and extended a $1.5
million line of credit to a nonprofit developer of self-help housing in
an area with a large population of farm workers.
20. Commenters expressed concern that Wells Fargo's lending
policies and practices developed outside Alaska would not take local
needs and conditions fully into account. Wells Fargo has stated that all
decisions about small business models, risks, and pricing strategies
would be made in Alaska.
21. In 2000, Wells Fargo Bank committed to make a $6 million
LIHTC investment to provide affordable single-family rental housing
in rural areas to Native Americans.
605
women- and minority-owned small businesses. Wells Fargo
Bank also took a leading role in developing and promoting
the Capital Access Program, a partnership of state government and private lenders created to increase the availability
of credit to small business borrowers through guaranty
fund arrangements.
Investment Test. Wells Fargo Bank received an "outstanding" examination rating for its investment activities.
The examination report stated that Wells Fargo Bank exhibited strong levels of community development investments, especially in California, Arizona, and Washington,
where the bank made 83 percent by number and 76 percent
by dollar volume of its total investments. Overall, the bank
made approximately 2,400 qualifying investments, totaling
more than $227 million. Examiners noted that, for many
community development projects in California, Wells
Fargo Bank was either the first, the largest, or the only
investor. Through its affordable housing investments, Wells
Fargo Bank helped create more than 6,500 housing units
for LMI households. The bank also invested almost $26
million in regional and national organizations addressing
affordable housing and small business credit needs in the
bank's assessment areas. In addition, Wells Fargo Bank
contributed more than $21 million to governmentsubsidized programs, nonprofit developers, and social service groups.
Service Test. Wells Fargo Bank received an examination
rating of "high satisfactory" for its retail banking services
in its CRA assessment areas. Examiners reported that,
during the review period, Wells Fargo Bank's service delivery systems were reasonably accessible to individuals of
different income levels and often were located in popular
shopping areas that were accessible by public transportation. 22
Wells Fargo Bank used a variety of formats for its
branches, but the formats it used most frequently offered
the full array of the bank's products and services. According to the examination report, Wells Fargo Bank maintained branch hours that were reasonable and convenient to
LMI communities and individuals, including Saturday
hours at most branches.
The report stated that Wells Fargo Bank offered a variety
of loan and deposit products through its branch network
and also maintained alternative delivery systems, including
24-hour telephone banking, internet banking, and banking
by mail. Wells Fargo Bank offered products and services
such as no-fee checking accounts for individuals, basic
small business checking, ATM-based international remittance services, and home mortgage loan centers in LMI
communities.
Examiners found that Wells Fargo Bank had a satisfactory record of branch openings and closings. The bank's
branch closure policy provided for local management to
22. One commenter alleged that Wells Fargo failed to hire additional community development loan officers to serve LMI and predominately minority communities despite Wells Fargo's indication in
a previous transaction that it would do so. Wells Fargo has indicated in
this case that it has achieved those hiring goals.
606
Federal Reserve Bulletin • August 2000
review the impact of any proposed branch closing, and
branch closings during the review period did not adversely
affect the accessibility of the bank's delivery systems.
During the review period, the bank opened 78 branches, or
17 percent of all its new branches, in LMI communities,
and installed seven off-site ATMs in LMI communities.
The bank retained 22 branches in LMI areas that were
experiencing low growth and profitability to ensure adequate service in these communities. Wells Fargo Bank also
closed 63 branches, or 25 percent of all branches that it
closed, in LMI communities. 23 Wells Fargo has indicated
to the Board that it does not intend to close any rural
branches of Alaska Bank or reduce Alaska Bank's array of
services to rural areas.
2. Alaska Bank's CRA Performance
Record
Examiners commended Alaska Bank for its responsiveness
to the lending, investment, and service needs of businesses
and individuals throughout its service area, including LMI
individuals. Alaska Bank received high ratings for offering
a range of residential loan products and for meeting the
credit needs of communities in a state whose geography
posed significant challenges. Examiners stated that Alaska
Bank received its "outstanding" rating in large part because of its performance in the rural portion of its assessment area, which constitutes all the state outside the Anchorage MSA.
Lending Test. Alaska Bank had a strong record of lending to individuals and businesses throughout its assessment
area, including those in LMI communities. According to
examiners, Alaska Bank made a high volume of residential
mortgage, consumer, community development, and small
business loans, particularly home improvement and home
refinancing loans. During the review period, which extended from 1997 through 1998, the institution made approximately 11,000 home purchase, rehabilitation, and refinance loans, totaling more than $1 billion, and 20 loans,
totaling $39 million, to support the development of affordable housing and other community revitalization projects. 24
The examination report noted that Alaska Bank was the
leader in home mortgage originations in each of its assessment areas and had an excellent system for distributing
home purchase and home improvement loans to borrowers
at various income levels in rural communities. Despite the
inclusion of large rural regions with low population densi-
23. Section 42 of the Federal Deposit Insurance Act (12 U.S.C. §
183 lr-1), as implemented by the Joint Policy Statement Regarding
Branch Closings (64 Federal Register 34,844 (1999)), requires that a
bank provide its customers and the appropriate federal supervisory
agency with at least 90 days notice before the date of the proposed
branch closing and the general public with at least 30 days notice. The
bank also is required to provide reasons and other supporting data for
the closure, consistent with the institution's written policy for branch
closings. The law does not authorize federal regulators to prevent
closing of any branch.
24. Funded projects included the development of 24 housing units
for very low-income households, the purchase of a power generation
system for a subsistence-level fishing village, and the purchase of a
primary health care center to serve native villages.
ties in its assessment areas, and a severe shortage of
affordable housing in those areas, Alaska Bank had no
significant gaps in its lending activities. In fact, Alaska
Bank's market share of home purchase and home improvement lending in LMI communities in rural areas was larger
than its overall market share for these types of loans.
Alaska Bank also originated or purchased 3,415 small
business loans, totaling $254.6 million. 25
Alaska Bank used flexible underwriting procedures consistent with safe and sound lending practices to help meet
the credit needs of LMI home buyers and small businesses
in its assessment area. Alaska Bank participated in eight
flexible lending programs, including a U.S. Department of
Agriculture ("USDA") rural development program, a U.S.
Department of Housing and Urban Development program
focused to assist Native American and Alaskan Native
borrowers, state-sponsored housing finance programs, a
partnership with Anchorage Neighborhood Housing Services, and a proprietary consumer loan program. 26
Investment Test. Alaska Bank received a rating of "high
satisfactory" on the investment test of its CRA examination. The examination report stated that Alaska Bank had a
favorable record of investing and making grants in communities in its assessment area. The bank made approximately
$20.8 million in qualified investments, including $279,000
in grants and donations to community housing and development organizations. The bank also assisted a rural municipality in a complex bond transaction that raised
$18 million to provide construction financing for two rural
health clinics and an administrative center to serve lowincome communities.
Service Test. Alaska Bank received an "outstanding"
examination rating for providing retail banking services to
its assessment areas. Examiners stated that the bank was a
leader in providing community development services
throughout the state. 27 In addition, 70 percent of Alaska
Bank's branches and 64 percent of its ATMs were located
outside the Anchorage MSA. In the Anchorage MSA,
although only approximately 26 percent of the population
were LMI individuals, almost half of Alaska Bank's
branches were located in LMI census tracts. Nineteen of
25. Examiners also noted that Alaska Bank had the largest portfolio
of consumer loans in the state, which was particularly significant
because such loans in rural areas often helped to provide equipment
and supplies needed for subsistence-level occupations.
26. Under the Alaska Housing Finance Corporation ("AHFC")
Tax-Exempt First-Time Home Buyers Program, featuring reduced
interest rates and down payments, and the AHFC Interest Rate Reduction for Low-Income Borrowers Program, featuring reduced interest
rates determined by the borrower's income, the bank made 832 loans,
totaling $75.8 million. In 1999, the bank made 369 loans, totaling
$36.3 million. Alaska Bank was the first bank in Alaska to be certified
under a USDA partial guarantee program for small business loans and
loans to nonprofit organizations in small rural communities, and made
23 loans, totaling $22 million, under this program during the review
period.
27. For example, Alaska Bank entered into a partnership with the
Arctic Development Council to plan and promote regional economic
development in the North Slope borough and participated in several
consortia to expand affordable housing opportunities in areas outside
Anchorage.
Legal Developments
the bank's branches maintained Saturday business hours.
Alaska Bank did not close any branches during the review
period.
Alaska Bank also operated 122 ATMs within its assessment area, 55 of which were deposit-taking facilities. Examiners found that the ATM distribution was reasonable
for both the Anchorage M S A and the rural regions in the
bank's assessment area.
Examiners noted that the geography of Alaska presented
major obstacles for Alaska Bank and other Alaskan banking organizations, including high transportation and communication costs, particularly in remote areas; lack of a
developed infrastructure; a fragmented population; and
fragile economic conditions. To meet these challenges,
Alaska Bank developed alternative products and service
delivery systems, including telephone loan origination programs, internet banking, and banking by mail. 28 Alaska
Bank's Community Agent Program assigned five employees to remote village locations to provide basic banking
services and financial education to residents and ongoing
advice to the bank about the credit needs of the villages.
Alaska Bank also offered bilingual services through a
network of employees throughout the bank who spoke
Chinese, Tagalog, Korean, Russian, Spanish, and Yupik.
The bank also created a Yupik-language loan application
for use in branches in southwest Alaskan villages.
The bank offered a range of home-buying and financial
education classes at locations in the Anchorage MSA.
More than 500 prospective homeowners, 50 percent of
whom were LMI individuals, attended the program during
the review period. Alaska Bank also supported and subsidized affordable housing programs and groups throughout
its assessment area. 29
B. Fair Lending Records
1. Wells Fargo Bank
OCC examiners analyzed Wells Fargo Bank's compliance
with federal fair lending laws. The examination included a
sampling of residential home improvement and automobile
loans and a review of fair housing complaints registered
against the bank.
Examiners found no evidence of prohibited discrimination or illegal credit practices at Wells Fargo Bank in the
underwriting of home improvement and automobile loans.
Examiners reported that the bank's loan review process
and training of employees were adequate to ensure compliance with federal fair lending laws and that the bank
complied with fair lending laws and regulations.
2. Alaska Bank
Examiners evaluated Alaska Bank's compliance with federal fair lending laws by reviewing a sample of applica-
28. Although the area outside the Anchorage MSA provided 42
percent of the bank's deposits, it accounted for 67 percent of the
bank's loans and 61 percent of its lending by dollar volume.
29. For example, Alaska Bank provided free loan servicing for
loans originated by Habitat for Humanity.
607
tions for mobile home financing made by white and Alaskan Native applicants. Examiners concluded that Alaska
Bank complied with fair lending laws and found no evidence of disparate treatment. Examiners found no violations of fair lending laws by Alaska Bank and also determined that the bank had satisfactory procedures in place to
ensure compliance with federal fair lending laws.
C. HMDA Data
The Board also has considered carefully the lending
records of Wells Fargo and National Bancorp in light of
comments regarding 1998 HMDA data for certain subsidiaries of the organizations. In general, the H M D A data
indicate good penetration by both organizations of all
geographic areas they serve, including LMI areas, and of
groups of borrowers at all income levels. The data also
reflect, however, certain disparities in the rates of loan
applications, originations, and denials by racial group. 30
The Board is concerned when the record of an institution
indicates such disparities in lending and believes that all
banks are obligated to ensure that their lending practices
are based on criteria that ensure not only safe and sound
lending but also equal access to credit by creditworthy
applicants regardless of their race. The Board recognizes,
however, that H M D A data alone provide an incomplete
measure of an institution's lending in its community, because these data cover only a few categories of housingrelated lending. H M D A data, moreover, provide only limited information about the covered loans. 31 H M D A data,
therefore, have limitations that make them an insufficient
basis, absent other information, for concluding that an
institution has not adequately assisted in meeting its community's credit needs or has engaged in illegal lending
discrimination.
Because of the limitations of H M D A data, the Board has
considered these data carefully in light of other information, including examination reports that provide an on-site
evaluation of the compliance by the subsidiary banks of
National Bancorp and Wells Fargo with fair lending laws
and the overall lending and community development activities of the banks. As discussed, examiners found compliance with fair lending laws at the most recent examinations
of the subsidiary depository institutions of Wells Fargo and
National Bancorp. The Board also has considered the
HMDA data in light of the overall lending records of Wells
Fargo and National Bancorp. Both organizations have
records that demonstrate strong CRA performance and the
provision of substantial assistance in meeting the credit
needs of their communities.
30. For example, in certain MS As, Wells Fargo's denial rate for
African-American applicants for home mortgage loans is higher than
its denial rate for white applicants.
31. The data, for example, do not account for the possibility that an
institution's outreach efforts may attract a larger proportion of marginally qualified applicants than other institutions attract and do not
provide a basis for an independent assessment of the creditworthiness
of applicants.
608
Federal Reserve Bulletin • August 2000
D. Conclusion on Convenience and Needs Analysis
In reviewing the proposal's effect on the convenience and
needs of the communities to be served by the combined
organization, the Board has considered carefully all facts
of record, including the public comments received, responses to comments, and reports of examinations of the
C R A performance of the institutions involved. Based on a
review of the entire record, and for the reasons discussed
above, the Board concludes that convenience and needs
considerations, including C R A performance records of the
subsidiary depository institutions of Wells Fargo and National Bancorp, are consistent with approval.
Financial,
Managerial,
and Other Supervisory
Factors
The B H C Act also requires the Board, in acting on an
application, to consider the financial and managerial resources and future prospects of the companies and banks
involved in a proposal, and certain other supervisory factors. The Board has carefully considered the financial and
managerial resources and future prospects of Wells Fargo
and National Bancorp and their respective subsidiary depository institutions, and other supervisory factors in light
of all the facts of record, including confidential reports of
examination and other supervisory information received
from the primary federal supervisors of the organizations.
Based on these and other facts of record, the Board
concludes that considerations relating to the financial and
managerial resources and future prospects of Wells Fargo,
National Bancorp, and their respective subsidiaries are
consistent with approval of the proposal, as are the other
supervisory factors that the Board must consider under
section 3 of the B H C Act.
that have been considered carefully by the Board in acting
on the proposal. Commenters' requests fail to demonstrate
why their comments do not present their views adequately
and fail to identify disputed issues of fact that are material
to the Board's decision that would be clarified by a public
meeting or hearing or to indicate the additional material
issues that would be brought forward by other members of
the public. Commenters also have not demonstrated, in
view of the substantial record in this case, the need to
extend the public comment period. For these reasons, and
based on all the facts of record, the Board has determined
that a public meeting or hearing and an extension of the
public comment period are not required or warranted in
this case. Accordingly, the requests for a public meeting or
hearing and an extension of the comment period are denied. The Board's approval of the proposal is specifically
conditioned on compliance by Wells Fargo with all the
commitments made in connection with the proposal. These
commitments and conditions are deemed to be conditions
imposed in writing by the Board in connection with its
findings and decisions and, as such, may be enforced in
proceedings under applicable law.
The acquisition may not be consummated before the
fifteenth calendar day after the effective date of this order,
or later than three months after the effective date of this
order, unless such period is extended for good cause by the
Board or by the Federal Reserve Bank of San Francisco,
acting pursuant to delegated authority.
B y order of the Board of Governors, effective June 21,
2000.
Voting for this action: Chairman Greenspan, Vice Chairman Ferguson, and Governors Kelley and Meyer. Absent and not voting: Governor Gramlich.
JENNIFER J. JOHNSON
Conclusion
Based on the foregoing, the Board has determined that the
application should be, and hereby is, approved. 3 2 Commenters also allege that public meetings or hearings are
necessary to present the v i e w s of residents of remote native
villages in which English is not spoken fluently. Under its
rules, the Board may, in its discretion, hold a public meeting or hearing on an application to acquire a bank if a
meeting or hearing is necessary or appropriate to clarify
factual issues related to the application and to provide an
opportunity for testimony. 12 C.F.R. § 225.16(e). The
Board has considered carefully the commenters' requests
in light of all the facts of record. In the Board's view,
commenters have had ample opportunity to submit their
views, and have submitted written substantial comments
32. Commenters requested that the Board hold a public meeting or
hearing on the proposal and extend the public comment period.
Section 3(b) of the BHC Act does not require the Board to hold a
public hearing on an application unless the appropriate supervisory
authority for the bank to be acquired makes a timely written recommendation of denial of the application. The Board has not received
such a recommendation from the appropriate supervisory authorities.
Secretary
of the
Board
Banking
Products
Appendix
Competitive
Analysis
of Individual
Home mortgage lending. The Board has determined previously that the geographic market for home mortgage lending is local. 1 The Anchorage, Alaska, M S A is the only area
of Alaska for which all home mortgage lenders are required to report lending data under the H M D A . Based on
1998 H M D A data, National Bancorp originated 18.2 percent of all home mortgage loans made in the Anchorage
M S A , and Wells Fargo originated 5.4 percent of all such
loans. Were an HHI constructed for home mortgage lending in the Anchorage M S A , consummation of the proposal
would increase the HHI by 195 points to 1247, and the
market for home mortgage lending would remain moderately concentrated. During 1999, Wells Fargo closed all its
home mortgage lending offices in Anchorage. Accordingly,
the competitive effects of the proposal in the Anchorage
1. See Norwest Corporation,
(1996) ("Norwest Order").
82 Federal
Reserve
Bulletin
683
Legal Developments
M S A apparently would be smaller than indicated by the
HHI. 2
Outside the Anchorage MSA, HMDA data are not a
reliable basis for calculating the market share of home
mortgage lenders, because in non-MSA areas only larger
depository institutions are required to report. For example,
in the borough of Juneau, Alaska, where Wells Fargo has
its only home mortgage lending office in the state, there are
five commercial banks, of which the second and fifth
largest are not H M D A reporters. There also are more than
30 home mortgage lenders in the borough of Juneau that
are not banks. In addition, barriers to entry into home
mortgage lending in the borough appear to be low. The
competitive effects of the proposal on home mortgage
lending in the borough of Juneau, therefore, are not expected to be significantly adverse.
609
the proposal on consumer lending are not expected to be
significantly adverse.
Orders I s s u e d U n d e r S e c t i o n 4 o f the B a n k H o l d i n g
Company Act
Northern Star Financial, Inc.
Mankato, Minnesota
Order Denying the Acquisition of a Savings Association
Northern Star Financial, Inc. ("Northern Star"), a bank
holding company within the meaning of the Bank Holding
Company Act ("BHC Act"), has requested the Board's
approval under sections 4(c)(8) and 4(j) of the BHC Act
(12 U.S.C. §§ 1843(c)(8) and 1843(j)) and section 225.24
of the Board's Regulation Y (12 C.F.R. 225.24) to acquire
all the voting shares of First Federal Holding Company of
Morris, Inc. ("First Federal"), and thereby acquire First
Federal Savings Bank ("First Federal Savings"), Morris,
Minnesota.
The Wells Fargo home mortgage lending office in Juneau does not serve areas outside the borough of Juneau to
a significant degree. 3 Wells Fargo serves Alaska outside
Juneau through a variety of remote delivery channels,
including mortgage brokers, national telephone centers,
solicitation of affinity groups and existing customers, corporate relocation services, and the internet. These delivery
channels do not use marketing strategies focused on geographic markets, and their loan pricing is not based on
local market conditions. 4 The number and dollar volume of
home mortgage loans made by Wells Fargo through these
delivery channels is less than 1 percent of all such loans
made by Wells Fargo in Alaska. In the less populated or
more inaccessible areas of Alaska, therefore, Wells Fargo
participates only in a submarket of remotely delivered
home mortgage lending that is regional or national in scope
and for which barriers to entry are low. Consummation of
the proposal would not have a significantly adverse effect
on competition in this submarket.
Notice of the proposal, affording interested persons an
opportunity to submit comments has been published (65
Federal Register 5873 (2000)). The time for filing comments has expired, and the Board has considered the notice
and all comments received in light of the factors set forth
in section 4 of the BHC Act.
Northern Star's banking subsidiary, Northern Star Bank,
Mankato, Minnesota ("Bank"), is the 417th largest depository institution in Minnesota, controlling deposits of $6.9
million, representing less than 1 percent of the total deposits in depository institutions in the state ("state deposits"). 1
First Federal Savings is the 174th largest depository institution in Minnesota, controlling deposits of $48.3 million,
representing less than 1 percent of state deposits.
Consumer lending. The market for consumer lending
includes many competitors of depository institutions, including credit card companies, consumer finance companies, and seller financing affiliates of commercial firms,
that operate on a regional or national level. Many local
competitors of depository institutions also exist, including
credit unions in particular and smaller consumer finance
companies, and Wells Fargo's market share is small. For
example, at year end 1999, Wells Fargo's consumer finance subsidiary, Norwest Financial, Inc., had approximately $32.3 million of loans and sales finance contracts
booked at its three offices in the Anchorage MSA, while
Alaska U S A Federal Credit Union, Anchorage, Alaska, the
largest credit union in the Anchorage MSA, held $659
million of non-mortgage loans. The competitive effects of
Section 4(j) of the BHC Act requires that, in reviewing a
proposal to acquire a savings association, 2 the Board consider whether the acquisition "can reasonably be expected
to produce benefits to the public . . . that outweigh possible
adverse effects, such as undue concentration of resources,
decreased or unfair competition, conflicts of interest, or
unsound banking practices." 3 The Board's rules and longstanding practice provide that the evaluation of possible
public benefits and adverse effects must include an evaluation of the financial and managerial resources of the notificant, including its subsidiaries and any company to be
acquired, and the effect of the proposed transaction on
those resources, as well as an evaluation of the management expertise, internal-control and risk-management systems, and capital of the notificant 4
2. Barriers to entry also appear to be low. There are six depository
institutions in the Anchorage MSA, but 199 lenders reported under the
HMDA that they received mortgage loan applications from the MSA
in 1998.
3. In 1999, the office originated 268 loans, totaling $42.5 million, of
which 215, totaling $34.8 million, were made in the borough.
4. See Norwest Order at 683 n.8.
1. State and market data are as of June 30, 1999. In this context,
depository institutions include commercial banks, savings banks, and
savings associations.
2. The Board previously has determined by regulation that operating
a savings association is closely related to banking for purposes of
section 4(c)(8) of the BHC Act. 12 C.F.R. 225.28(b)(4)(ii).
3. 12 U.S.C. § 1843(j)(2)(A).
4. 12 C.F.R. 225.26(b). In assessing notices by small bank holding
companies, the Board will take into account a full range of financial
610
Federal Reserve Bulletin • August 2000
In connection with its review of the factors under section
4 of the BHC Act in this case, the Board has carefully
reviewed the financial and managerial resources of Northern Star, First Federal, and their respective subsidiaries and
the effect the transaction would have on those resources.
Northern Star contends that consummation of this proposal can reasonably be expected to result in public benefits that justify approval. In particular, Northern Star points
out that Bank is currently well capitalized and that this
proposal includes an exchange of stock and a stock offering
that would raise a significant amount of additional capital
for both Bank and First Federal Savings, which in turn
would provide a source of funds to increase earning assets.
Northern Star also asserts that the proposal would bring
additional management to Northern Star, and expand its
market and potential new business opportunities.
The Board has carefully considered all the facts of
record, including relevant examination reports, information
obtained from other federal and state banking authorities,
other confidential supervisory information, and information provided by the management of Northern Star. This
proposal represents a substantial expansion by a bank
holding company that is considerably smaller than the
company to be acquired, and is located in a community
more than 100 miles from Bank. Bank began operations in
January 1999, has had poor earnings, and has never met its
earnings projections. The Board has considered the challenge that integrating the two organizations would pose,
the history of current management, the earnings projections, and the history of Northern Star's management in
achieving earnings projections. Management is working to
improve earnings and an expansion by Northern Star at this
time, in particular the acquisition of an institution that is
substantially larger than and distant from Bank, would
divert Northern Star's management from effectively attending to the management of Bank. Based on this review, the
Board concludes that the financial and managerial resources at this time are not consistent with approval of the
proposed expansion by Northern Star. The Board believes
that the potential benefits of consummation of this proposal, which are speculative and could be achieved in other
ways, would not outweigh the adverse effects in this case.
Northern Star and First Federal do not compete directly
in any banking market. Consummation of the proposal
would not result in any significantly adverse effects on
competition in any relevant banking market. On the other
hand, there are no facts that indicate that the effects of this
proposal on competition in any relevant market would
result in public benefits that would outweigh the potential
adverse effects discussed above. As noted above, to the
extent this expansionary proposal distracts the attention of
the management of Northern Star from focusing on Bank,
and other information about the notificant and its current and proposed
subsidiaries, including the recent trend and stability of earnings, past
and prospective growth, and the record and competency of management. See Appendix C to Regulation Y (12 C.F.R. Part 225, Appendix C). See also The Cedar Vale Bank Holding Company, 75 Federal
Reserve Bulletin 257 (1990).
it could have adverse effects on competition. The Board
also has considered the CRA performance records of Bank
and First Federal Savings and the other factors required
under section 4(j)(2)(A) of the BHC Act. While these
factors are consistent with approval, the Board concludes
that they do not outweigh the adverse considerations discussed above.
For these reasons and based on all the facts of record, the
Board has determined that the proposal does not meet the
statutory requirements for approval under section 4 of the
BHC Act that the notice should be and hereby is, denied.
By order of the Board of Governors, effective June 26,
2000.
Voting for this action: Chairman Greenspan, Vice Chairman Ferguson, and Governors Kelley, Meyer, and Gramlich.
JENNIFER J. JOHNSON
Secretary of the Board
ORDERS ISSUED UNDER BANK MERGER ACT
The Chase Manhattan Bank
New York, New York
Order Approving the Merger of Banks
The Chase Manhattan Bank, ("Chase-NY "), a state member bank, has applied under section 18(c) of the Federal
Deposit Insurance Act (12 U.S.C. § 1828(c)) ("Bank
Merger Act") to acquire Chase Bank of Texas, National
Association, Houston, Texas ("Chase-TX"), through
merger and to retain and operate branches at the current
locations of the Chase-TX branches. 1
Notice of the application, affording interested persons an
opportunity to submit comments, has been given in accordance with the Bank Merger Act and the Board's Rules of
Procedure (12 C.F.R. 262.3(b)). As required by the Bank
Merger Act, reports on the competitive effects of the
merger were requested from the United States Attorney
General and the other federal banking agencies. The time
for filing comments has expired, and the Board has considered the application and all the facts of record in light of
the factors set forth in the Bank Merger Act.
Chase-NY and Chase-TX are wholly owned subsidiaries
of The Chase Manhattan Corporation, N e w York, N e w
York, ("Chase"). Chase is the third largest commercial
banking organization in the United States, with $391.5
billion in total assets. 2 Chase-NY is the largest depository
institution in N e w York, controlling deposits of $97.7
billion, representing 23.3 percent of the total deposits in
depository institutions in the state. Chase-TX is the second
largest depository institutions in Texas, controlling deposits of $18.5 billion, representing 8.9 percent of the total
1. These branches are listed in the Appendix.
2. Asset data are as of March 31, 2000.
Legal Developments
deposits in depository institutions in the state. 3 This proposal represents a reorganization of Chase's existing banking operations.
Interstate
Analysis
Section 102 of the Riegle-Neal Interstate Banking and
Branching Efficiency Act of 1994 ("Riegle-Neal Act")
authorizes a bank to merge with another bank under certain
conditions unless, before June 1, 1997, the home state of
one of the banks involved in the transaction adopted a law
expressly prohibiting merger transactions involving out-ofstate banks. 4 The Riegle-Neal Act also authorizes the acquiring bank to retain and operate, as a main office or
branch, any bank offices of the acquired bank. 5
N e w York and Texas have enacted legislation allowing
interstate mergers between banks located in their states and
out-of-state banks pursuant to the provisions of the RiegleNeal Act. C h a s e - N Y has notified the appropriate state
banking agencies regarding its proposal to consolidate its
banking operations and has provided a copy of its Bank
Merger Act application to all the relevant state agencies. In
light of the foregoing, it appears that the proposal complies
with the requirements of the Riegle-Neal Act. 6
Other
Factors
The Bank Merger Act requires the Board to consider the
financial and managerial resources and future prospects of
the institutions involved, and the convenience and needs of
the communities to be served. The Board has reviewed
these factors in light of the facts of record, including
supervisory reports of examination assessing the financial
and managerial resources of Chase-NY and Chase-TX, and
information provided by the banks. Based on all the facts
of record, the Board concludes that the financial and managerial resources and future prospects of Chase-NY and
Chase-TX are consistent with approval of the proposal.
The Board has also considered likely effects of the
proposal on competition. A s noted above, the proposal
represents the reorganization of two banks that have been
affiliates for a number of years. Based on all the facts of
record, the Board concludes that consummation of the
3. In this context, depository institutions include commercial banks,
savings banks, and savings associations. All banking data are as of
June 30, 1999.
4. 12 U.S.C. § 1831u.
5. 12 U.S.C. § 1831u(d)(l).
6. See 12 U.S.C. § 1831u. Chase-NY is adequately capitalized and
adequately managed, as defined in the Riegle-Neal Act. The New
York and Texas Departments of Banking have indicated that this
transaction would comply with applicable New York and Texas law.
See NY Banking Law, Art. 5-C, § 225; Tex. Fin. Code Ann
§§ 202.001, 203.003. Chase-TX has been in existence and operation
for the minimum amount of time required by Texas law. See Tex. Fin.
Code Ann. § 203.005. On consummation of the proposal, Chase-NY
would control less than 10 percent of the total amount of deposits in
insured institutions in the United States. All other requirements of the
section 102 of the Riegle-Neal Act would also be met on consummation of the proposal.
611
proposal would not have a significantly adverse effect on
competition or on the concentration of banking resources
in any relevant banking market and that competitive considerations are consistent with approval.
In reviewing the convenience and needs factors, the
Board has carefully considered the effect of the proposal on
the convenience and needs of the communities to be served
in light of all the facts of record, including the records of
performance of the depository institutions of Chase under
the Community Reinvestment Act ("CRA"). The Board
also has carefully reviewed the lending records of
Chase-NY and Chase-TX, the policies and programs designed to ensure compliance with the fair lending laws,
recent data provided by Chase's depository institutions in
regulatory reports, and confidential supervisory information on the lending activities and policies governing those
activities. In addition, the Board has considered public and
confidential supervisory information provided by other appropriate agencies on the lending and C R A activities of
Chase-TX and Chase-NY. Based on this review and all the
facts of record, the Board concludes that considerations
relating to the convenience and needs factors are consistent
with approval of the proposal.
Based on the foregoing and all the facts of record, the
Board has determined that the application should be, and
hereby is, approved. Approval of the application is specifically conditioned on compliance by the banks with all the
commitments made in connection with this proposal and
with the conditions stated or referred to in this order. For
purposes of this action, the commitments and conditions
relied on in reaching this decision are conditions imposed
in writing by the Board and, as such, may be enforced in
proceedings under applicable law.
The merger may not be consummated before the fifteenth calendar day after the effective date of this order, or
later than three months after the effective date of this order,
unless such period is extended for good cause by the Board
or by the Federal Reserve Bank of N e w York, acting
pursuant to delegated authority.
B y order of the Board of Governors, effective June 14,
2000.
Voting for this action: Chairman Greenspan, Vice Chairman Ferguson, and Governors Kelley, Meyer, and Gramlich.
ROBERT DEV. FRIERSON
Associate
Secretary
of the
Board
Appendix
Branch offices of Chase Bank of Texas, National
Association to be acquired by Chase Manhattan
Bank
908 W. McDermott Drive, Allen, T X
4 8 2 8 S. Cooper Street, Arlington, T X
7 0 0 W. Arkansas Lane, Arlington, T X
5 0 0 E. Border Street, Arlington, T X
1000 E. 41st Street, Austin, T X
2711 W. Anderson Lane, Austin, T X
612
Federal Reserve Bulletin • August 2000
7805 Clock Tower Drive, Austin, TX
7301 N. FM 620, Austin, TX
13776 N. Highway 183, Austin, TX
700 Lavaca Street, Austin, TX
12222 Research Boulevard, Austin, TX
6600 So Mopac Expressway, Austin, TX
2224 Walsh Tarlton Lane, Austin, TX
6330 West Loop South, Bellaire, TX
12400 W. Highway 71, Bee Cave, TX
2300 Boca Chica Boulevard, Brownsville, TX
1475 W. Ruben M. Torres Boulevard, Brownsville, TX
1801 Hebron Parkway East, Carrollton, TX
190 E. Whitestone (Highway 1431), Cedar Park, TX
5000 Colleyville Boulevard, Colleyville, TX
1320 W. Davis Street, Conroe, TX
1103 1-45 North, Conroe, TX
9409 Garland Road, Dallas, TX
6251 Greenville Avenue, Dallas, TX
2325 Gus Thomasson Road, Dallas, TX
6517 Hillcrest Avenue, Dallas, TX
4435 S. Lancaster Road, Dallas, TX
12750 Merit Drive, Dallas, TX
10715 Preston Road, Dallas, TX
13101 Preston Road, Dallas, TX
5050 Quorum Drive, Dallas, TX
2200 Ross Avenue, Dallas, TX
2777 N. Stemmons Freeway, Dallas, TX
2945 Walnut Hill Lane, Dallas, TX
2223 S. Zang Boulevard, Dallas, TX
5760 Alameda Avenue, El Paso, TX
9601 Gateway Boulevard West, El Paso, TX
1533 N. Lee Trevino Drive, El Paso, TX
201 E. Main Drive, El Paso, TX
7598 N. Mesa, El Paso, TX
2829 Montana Avenue, El Paso, TX
11391 Montwood Drive, El Paso, TX
135 Shadow Mountain Drive, El Paso, TX
5209 Wren Avenue, El Paso, TX
12875 Josey Lane, Farmers Branch, TX
2501 FM 3040, Flower Mound, TX
3217 E. California Parkway, Fort Worth, TX
4809 Camp Bowie Boulevard, Fort Worth, TX
201 Main Street-Chase Tower, Fort Worth, TX
611 S. Friendswood Drive, Friendswood, TX
4998 Preston Road, Frisco, TX
3200 Broadway Boulevard, Garland, TX
3445 W. Buckingham Road, Garland, TX
700 East Main Street, Grand Prairie, TX
1514 W. Tyler, Harlingen, TX
9309 Katy Freeway, Houston, TX
545 W. 19th Street, Houston, TX
5207 Airline Drive, Houston, TX
5445 Almeda Road, Houston, TX
2475 Bay Area Boulevard, Houston, TX
9709 Bellaire Boulevard, Houston, TX
7545 Bellfort Street, Houston, TX
6671 W. Bellfort Street, Houston, TX
11222 S. Belt Drive, Houston, TX
9525 Bissonnet Street, Houston, TX
1200 Clear Lake City Boulevard, Houston, TX
500 Dallas Street, Houston, TX
1001 Fannin Street, Houston, TX
6560 Fannin Street, Houston, TX
7505 Fannin Street, Houston, TX
616 FM 1960 Road West, Houston, TX
4205 FM 1960 Road West, Houston, TX
6910 FM 1960 Road West, Houston, TX
13103 FM 1960 Road West, Houston, TX
9130 N. Freeway, Houston, TX
3203 S W . Freeway, Houston, TX
11550 Fuqua Street, Houston, TX
4600 Highway 6 North, Houston, TX
3201 Kirby Drive, Houston, TX
6510 W. Little York Road, Houston, TX
1605 Lockwood Drive, Houston, TX
8799 N. Loop East, Houston, TX
711 Louisiana Street, Houston, TX
712 Main Street, Houston, TX
12401 S. Post Oak Road, Houston, TX
5177 Richmond Avenue, Houston, TX
4265 San Felipe Road, Houston, TX
5847 San Felipe Road, Houston, TX
6200 Highway 6 South, Houston, TX
600 Travis Street, Houston, TX
2900 Wesleyan Street, Houston, TX
10218 Westheimer Road, Houston, TX
10411 Westheimer Road, Houston, TX
580 Westlake Park Boulevard, Houston, TX
11806 Wilcrest Boulevard, Houston, TX
2900 Woodridge Street, Houston, TX
19747 U.S. Highway 59 North, Humble, TX
160 W. 1st Street, Humble, TX
860 Airport Freeway, Hurst, TX
111 E. Irving Boulevard, Irving, TX
545 E. John Carpenter Freeway, Irving, TX
7825 N. MacArthur Boulevard, Irving, TX
4 0 0 South Mason Road, Katy, TX
1075 Kingwood Drive, King wood, TX
2611 Lake Houston Parkway, Kingwood, TX
925 W. Main Street, Lewisville, TX
200 S. 10th Street, McAllen, TX
5601 N. 10th Street, McAllen, TX
4990 El Dorado Parkway, McKinney, TX
1030 Andrews Highway, Midland, TX
153 Landa Street, N e w Braunfels, TX
111 W. San Antonio Street, N e w Braunfels, TX
620 N. Grant Street, Odessa, TX
3933 Fairmont Parkway, Pasadena, TX
4004 Legacy Drive, Piano, TX
5976 W. Parker Road, Piano, TX
1517 Preston Road, Piano, TX
100 N. Central Expressway, Richardson, TX
920 N. IH 35, Round Rock, TX
16900 RR620, Round Rock, T X
7959 Fredricksburg Road, San Antonio, TX
512 Highland Boulevard, San Antonio, TX
1020 N.E. Loop 410, San Antonio, TX
1700 E. Southlake Boulevard, Southlake, TX
Legal Developments
25025 Interstate 45 North, Spring, TX
2430 State Highway 6, Sugar Land, TX
8201 Kuykendahl Road, The Woodlands, TX
4755 W. Panther Creek Drive, The Woodlands, TX
ORDERS ISSUED UNDER INTERNATIONAL BANKING
ACT
Banco Comercial Portugues, S.A.
Oporto, Portugal
Order Approving Establishment of a Representative
Office
Banco Comercial Portugues, S.A. ("Bank"), Oporto, Portugal, a foreign bank within the meaning of the International Banking Act ("IBA"), has applied under section
10(a) of the IBA (12 U.S.C. § 3107(a)) to establish a
representative office in Miami, Florida. The Foreign Bank
Supervision Enhancement Act of 1991 ("FBSEA"), which
amended the IBA, provides that a foreign bank must obtain
the approval of the Board to establish a representative
office in the United States.
Notice of the application, affording interested persons an
opportunity to submit comments, has been published in a
newspaper of general circulation in Miami (The Miami
Herald, January 12, 2000). The time for filing comments
has expired, and all comments have been considered.
Bank, with consolidated assets of $62 billion, is the
largest banking organization in Portugal. Bank's subsidiary, Banco Portugues do Atlantico, S.A. ("Atlantico"),
Oporto, Portugal, operates internationally through numerous branches and agencies, including a state-licensed
branch in N e w York, N e w York, and a state-licensed
agency in Miami, Florida. Through subsidiaries and affiliates, Bank and Atlantico also engage in a variety of nonbanking activities in and outside Portugal, including asset
management, real estate and equipment leasing, and investment banking.
In acting on an application to establish a representative
office, the IBA and Regulation K provide that the Board
shall take into account whether the foreign bank engages
directly in the business of banking outside of the United
States and has furnished to the Board the information it
needs to assess the application adequately. The Board also
shall take into account whether the foreign bank and any
foreign bank parent is subject to comprehensive supervision or regulation on a consolidated basis by its home
country supervisor. 1 The Board may take into account
1. See 12 U.S.C. § 3107(a)(2); 12 C.F.R. 211.24(d)(2). In assessing
this standard, the Board considers, among other factors, the extent to
which the home country supervisors:
(i) Ensure that the bank has adequate procedures for monitoring
and controlling its activities worldwide;
(ii) Obtain information on the condition of the bank and its
subsidiaries and offices through regular examination reports,
audit reports, or otherwise;
613
additional standards set forth in the IBA and Regulation K. 2
As noted above, Bank engages directly in the business of
banking outside the United States through its banking
operations in Portugal and elsewhere. Bank also has provided the Board with the information necessary to assess
the application through submissions that address the relevant issues.
With respect to home country supervision of Bank, the
Board has considered the following information. The Bank
of Portugal, the central bank of Portugal, is the principal
supervisory authority of Bank. The Board previously has
determined, in connection with applications involving other
Portuguese banks, that those banks were subject to comprehensive consolidated supervision by the Bank of Portugal. 3
Bank is supervised by the Bank of Portugal in substantially
the same manner as those other banks. Based on this
finding and all the facts of record, the Board concludes that
Bank is subject to comprehensive supervision on a consolidated basis by its home country supervisor.
The Board has taken into account the additional standards set forth in the IBA and in Regulation K. 4 The Bank
of Portugal has granted Bank approval to establish the
proposed office. With respect to the financial and managerial resources of Bank, taking into consideration Bank's
record of operations in its home country, its overall financial resources, and its standing with its home country
supervisor, the Board has determined that financial and
managerial considerations are consistent with approval. In
addition, Bank appears to have the experience and capacity
to support the proposed office and has established controls
and procedures in the branch to ensure compliance with
applicable U.S. law, as well as controls and procedures for
its worldwide operations generally.
With respect to access to information, the Board has
reviewed the restrictions on disclosure in relevant jurisdictions in which Bank operates and has communicated with
relevant government authorities about access to information. Bank has committed to make available to the Board
such information on the operations of Bank and any affiliate of Bank that the Board deems necessary to determine
and enforce compliance with the IBA, the Bank Holding
Company Act, and other applicable federal law. To the
extent that the provision of such information may be pro-
(iii) Obtain information on the dealings with and relationship
between the bank and its affiliates, both foreign and domestic;
(iv) Receive from the bank financial reports that are consolidated
on a worldwide basis, or comparable information that permits
analysis of the bank's financial condition on a worldwide
consolidated basis;
(v) Evaluate prudential standards, such as capital adequacy and
risk asset exposure, on a worldwide basis. These are indicia
of comprehensive consolidated supervision; no single factor
is essential and other elements may inform the Board's
determination.
2. See 12 U.S.C. § 3105(d)(3) and (4); 12 C.F.R. 211.24(c)(2).
3. See Banco Espirito Santo, S.A., 86 Federal Reserve Bulletin 418
(2000); Caixa Geral de Depdsitos S.A., 85 Federal Reserve Bulletin
774 (1999).
4. See 12 U.S.C. § 3105(d)(3) and (4); 12 C.F.R. 211.24(c)(2).
614
Federal Reserve Bulletin • August 2000
hibited or impeded by law or otherwise, Bank has committed to cooperate with the Board to obtain any necessary
consents or waivers that might be required from third
parties in connection with disclosure of certain information. In addition, subject to certain conditions, the Bank of
Portugal may share information on Bank's operations with
other supervisors, including the Board. In light of these
commitments and other facts of record, and subject to the
condition described below, the Board has concluded that
Bank has provided adequate assurances of access to any
necessary information the Board may request.
On the basis of all the facts of record, and subject to the
commitments made by Bank, as well as the terms and
conditions set forth in this order, the Board has determined
that Bank's application to establish a representative office
in Miami should be, and hereby is, approved. 5 Should any
restrictions on access to information on the operations or
activities of Bank or any of its affiliates subsequently
interfere with the Board's ability to determine and enforce
compliance by Bank or its affiliates with applicable federal
statutes, the Board may require or recommend termination
of any of Bank's direct or indirect activities in the United
States. Approval of this application also is specifically
conditioned on Bank's compliance with the commitments
made in connection with this application and with the
conditions in this order. 6 The commitments and conditions
referred to above are conditions imposed in writing by the
Board in connection with its decision and may be enforced
in proceedings against Bank, its offices, and its affiliates
under applicable law.
By order of the Board of Governors, effective June 30,
2000.
Voting for this action: Chairman Greenspan, Vice Chairman Ferguson, and Governors Kelley and Gramlich. Absent and not voting:
Governor Meyer.
ROBERT DEV. FRIERSON
Associate
5. In a separate action, the Board today approved under section 3 of
the Bank Holding Company Act the application of Bank and certain of
its subsidiaries, including Atlantico, to become bank holding companies with respect to BPABank National Association, Newark, New
Jersey.
Secretary
of the
Board
6. The Board's authority to approve the establishment of the proposed office parallels the continuing authority of the State of Florida
to license offices of a foreign bank. The Board's approval of this
application does not supplant the authority of the State of Florida or its
agent, the Florida Department of Banking and Finance, to license the
proposed office of Bank in accordance with any terms or conditions
that the Florida Department of Banking and Finance may impose.
APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY ACT
By the Secretary
of the
Board
Recent applications have been approved by the Secretary of the Board as listed below. Copies are available upon request to
the Freedom of Information Office, Office of the Secretary, Board of Governors of the Federal Reserve System,
Washington, D.C. 20551.
Section 3
Applicant(s)
Bank(s)
Effective Date
Fulton Financial Corporation,
Lancaster, Pennsylvania
Skylands Financial Corporation,
Hackettstown, New Jersey
Skylands Community Bank,
Hackettstown, New Jersey
June 29, 2000
Legal Developments
615
APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY ACT
By Federal Reserve Banks
Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon request to
the Reserve Banks.
Section 3
Applicant(s)
Bank(s)
Reserve Bank
Effective Date
The Bancorp.com, Inc.,
Wilmington, Delaware
Bankoelwein, Inc.,
Oelwein, Iowa
Castle Creek Capital Partners Fund
Ha, LP,
Rancho Santa Fe, California
Castle Creek Capital Partners Fund
lib, LP,
Rancho Santa Fe, California
Central Financial Corporation,
Hutchinson, Kansas
Citizens Financial Corporation,
Cortez, Colorado
City Savings Bancshares, Inc.,
DeRidder, Louisiana
CommerceFirst Bancorporation,
Inc.,
Annapolis, Maryland
Community Investment Group, Ltd.,
Havana, Illinois
Cortez Investment Company,
Cortez, Colorado
Downing Partnership, L.P.,
Ellis, Kansas
Eggemeyer Advisory Corp.,
Rancho Sante Fe, California
WJR Corp.,
Rancho Santa Fe, California
Castle Creek Capital, LLC,
Ranch Santa Fe, California
Castle Creek Capital Partners Fund
I, LP,
Rancho Santa Fe, California
Castle Creek Capital Partners Fund
Ha, LP,
Rancho Santa Fe, California
Castle Creek Capital Partners Fund
lib, LP,
Ranch Santa Fe, California
TB.com Bank,
Wilmington, Delaware
Community Bank of Oelwein,
Oelwein, Iowa
State National Bancshares, Inc.,
Lubbock, Texas
Philadelphia
May 22, 2000
Chicago
June 15, 2000
San Francisco
June 14, 2000
Kansas City
June 21, 2000
Kansas City
June 6, 2000
Atlanta
June 12, 2000
Richmond
June 2, 2000
Chicago
June 7, 2000
Kansas City
June 6, 2000
Kansas City
June 21, 2000
San Francisco
June 14, 2000
Premier Bancshares, Inc.,
Jefferson City, Missouri
The Citizens State Bank of Cortez,
Cortez, Colorado
City Savings Bank & Trust Company,
DeRidder, Louisiana
CommerceFirst Bank,
Annapolis, Maryland
The Havana National Bank,
Havana, Illinois
Citizens Financial Corporation,
Cortez, Colorado
Ellis State Bank,
Ellis, Kansas
Independent Bankshares, Inc.,
Abilene, Texas
First State Bank, N.A.,
Abilene, Texas
State National Bancshares, Inc.,
Lubbock, Texas
616
Federal Reserve Bulletin • August 2000
Section 3—Continued
Applicant(s)
Bank(s)
Reserve Bank
Effective Date
Eggemeyer Advisory Corp.,
Rancho Sante Fe, California
WJR Corp.,
Rancho Santa Fe, California
Castle Creek Capital, LLC,
Ranch Santa Fe, California
State National Bancshares, Inc.,
Lubbock, Texas,
Castle Creek Capital Partners Fund I,
LP,
Rancho Santa Fe, California
Castle Creek Capital Partners Fund Ha,
LP,
Rancho Santa Fe, California
Castle Creek Capital Partners Fund lib,
LP,
Rancho Santa Fe, California
Commercial Guaranty Bancshares, Inc.,
Overland Park, Kansas
The Capital Company,
Overland Park, Kansas
First Alliance Bank and Trust Company,
Manchester, New Hampshire
Firstbank-St. Johns,
St. Johns, Michigan
Bank of Ventura,
Ventura, California
First Central Bank of Monroe County,
Sweetwater, Tennessee
First Central Bank of Monroe County,
Sweetwater, Tennessee
FNB Lockney,
Lockney, Texas
Liberty Bay Financial Corporation,
Poulsbo, Washington
North Sound Bank,
Poulsbo, Washington
Walton Bank & Trust Co.,
Monroe, Georgia
Gateway National Bank of St. Louis,
St. Louis, Missouri
Bank of Santa Clara,
Santa Clara, California
The Edgartown National Bank,
Edgartown, Massachusetts
Keene Bancorp, Inc.,
Keene, Texas
San Francisco
June 14, 2000
St. Louis
June 5, 2000
Boston
May 25, 2000
Chicago
May 26, 2000
St. Louis
June 5, 2000
Atlanta
June 9, 2000
Atlanta
June 9, 2000
Kansas City
May 31, 2000
San Francisco
May 24, 2000
Atlanta
June 7, 2000
St. Louis
June 5, 2000
San Francisco
June 14, 2000
Boston
May 25, 2000
Dallas
May 1, 2000
Leland National Bancorp, Inc.,
Leland, Illinois
LNB National Bank,
Leland, Illinois
State Bank of Ledyard, Iowa
Chicago
June 7, 2000
Chicago
June 8, 2000
Mahaska Investment Company,
Oskaloosa, Iowa
Chicago
June 2, 2000
Enterbank Holdings, Inc.,
Clayton, Missouri
eOneBanc Corp.,
Manchester, New Hampshire
Firstbank Corporation,
Alma, Michigan
First Banks, Inc.,
St. Louis, Missouri
First Central Bancshares, Inc.,
Lenoir City, Tennessee
First Security Group, Inc.,
Chattanooga, Tennessee
FNB Financial Services, Inc.,
Durant, Oklahoma
Frontier Financial Corporation,
Everett, Washington
Home Town Banking Corporation,
Monroe, Georgia
G.A.C., Inc.,
St. Louis, Missouri
Greater Bay Bancorp,
Palo Alto, California
Island Bancorp, Inc.,
Edgartown, Massachusetts
Keene Bancorp, Inc., 401(k)
Employee Stock Ownership Plan
& Trust,
Keene, Texas
Landmark Financial Group, Inc.,
Belvidere, Illinois
Ledyard Bancorporation, Inc.,
Ledyard, Iowa
Mahaska Investment Company
ESOP,
Oskaloosa, Iowa
Legal Developments
Section 3—Continued
Applicant(s)
Bank(s)
Reserve Bank
Effective Date
Minnwest Corporation,
Minnetonka, Minnesota
Monmouth Community Bancorp,
Minnwest Bank Sioux Falls,
Sioux Falls, South Dakota
Community Bancorp,
Long Branch, New Jersey
Monmouth Community Bank,
Long Branch, New Jersey
Carthage State Bancshares, Inc.,
Carthage, Texas
North American State Bank,
Belgrade, Minnesota
Borgerding Insurance Agency, Inc.,
Belgrade, Minnesota
North Georgia National Bank,
Calhoun, Georgia
Minneapolis
June 12, 2000
New York
May 31, 2000
Dallas
June 6, 2000
Minneapolis
June 7, 2000
Atlanta
June 5, 2000
Redstone Bancorporation, Inc.,
Houston, Texas
San Benito Bank,
Hollister, California
Los Robles Bancorp,
Thousand Oaks, California
Los Robles Bank,
Thousand Oaks, California
Aurora National Bank,
Aurora, Illinois
Dallas
June 20, 2000
San Francisco
June 12, 2000
San Francisco
June 12, 2000
New York
June 6,^2000
Heritage Bancorp, Inc.,
Hutto, Texas
Texas Heritage Bank,
Hutto, Texas
Savings Institute,
Willimantic, Connecticut
Great Southern Capital Corporation,
Meridian, Mississippi
Prairie State Bancshares,
Hoxie, Kansas
Atlanta
June 19, 2000
Boston
May 30, 2000
Atlanta
June 2, 2000
Kansas City
June 7, 2000
Independent Bankshares, Inc.,
Abilene, Texas
Hanover Bancorp, Inc.,
Hanover, Pennsylvania
Pointpathbank, N.A.,
Columbus, Georgia
Fort Gibson Bancshares, Inc.,
Fort Gibson, Oklahoma
USB Bankshares, Inc.,
Freeport, Illinois
Union Savings Bank,
Freeport, Illinois
Union Savings Bank,
Freeport, Illinois
Dallas
June 15, 2000
Philadelphia
June 8, 2000
Atlanta
June 6, 2000
Kansas City
June 15, 2000
Chicago
June 14, 2000
Chicago
June 14, 2000
Murphy-Payne Investments, Ltd.,
Tyler, Texas
NASB Shares, Inc.,
Belgrade, Minnesota
North Georgia Community Financial
Partners, Inc.
Calhoun, Georgia
Northwest Bancorporation, Inc.,
Houston, Texas
Pacific Capital Bancorp,
Santa Barbara, California
Pacific Capital Bancorp,
Santa Barbara, California
Popular, Inc.,
Hato Rey, Puerto Rico
Popular International Bank, Inc.,
Hato Rey, Puerto Rico
Popular North America, Inc.,
Mount Laurel, New Jersey
Regions Financial Corporation,
Birmingham, Alabama
SI Bancorp, Inc.,
Willimantic, Connecticut
Speed Bankshares, L.P.,
Meridian, Mississippi
The State Bank Hoxie Employee
Stock Ownership Plan,
Hoxie, Kansas
State National Bancshares, Inc.
Lubbock, Texas
Sterling Financial Corporation,
Lancaster, Pennsylvania
Synovus Financial Corp.,
Columbus, Georgia
Three Rivers Bankshares, Inc.,
Fort Gibson, Oklahoma
Union Bancshares, MHC,
Freeport, Illinois
USB Bankshares, Inc.,
Freeport, Illinois
617
618
Federal Reserve Bulletin • August 2000
Section 3—Continued
Applicant(s)
Bank(s)
Reserve Bank
Effective Date
Vail Banks, Inc.,
Vail, Colorado
Valley Capital Corporation,
Greenwood, Mississippi
Estes Bank Corporation,
Estes Park, Colorado
State Capital Corporation,
Brookhaven, Mississippi
State Bank and Trust Company,
Brookhaven, Mississippi
1st Choice Financial Corp.,
Greeley, Colorado
1st Choice Bank,
Greeley, Colorado
Wyoming National Bank,
Riverton, Wyoming
Kansas City
June 5, 2000
St. Louis
June 20, 2000
San Francisco
May 24, 2000
Kansas City
June 7, 2000
Applicant(s)
Nonbanking Activity/Company
Reserve Bank
Effective Date
Area Bancshares Corporation,
Owensboro, Kentucky
First State Bancshares, Inc.,
Middlesboro, Kentucky
Area Trust Company,
Owensboro, Kentucky
LexBanc Corporation,
Lexington, Kentucky
Lexington, Bank, FSB,
Lexington, Kentucky
Union Small Business Alliance, Inc.,
Lenox, Iowa
East Dubuque Bancshares, Inc.,
East Dubuque, Illinois
East Dubuque Savings Bank,
East Dubuque, Illinois
Newbrook Group LLC,
London, England
Newbrook Group LLC,
London, England
Newbrook Capital Management, Inc.,
London, England
Newbrook Capital Management LLC,
London, England
Newbrook Securities LLC,
London, England
FMT Holding Company,
Memphis, Tennessee
First Mercantile Trust Company,
Memphis, Tennessee
Central Trust Co.,
Memphis, Tennessee
FMT Technologies Co.,
Memphis Tennessee
First Mercantile Capital Management,
Inc.,
St. Louis
June 6, 2000
Cleveland
June 9, 2000
Chicago
June 15, 2000
St. Louis
June 14, 2000
New York
June 20, 2000
St. Louis
June 20, 2000
Wells Fargo & Co.,
San Francisco, California
Wyoming National Bancorporation,
Inc.,
Riverton, Wyoming
Section 4
Heartland Bancshares, Inc.,
Lenox, Iowa
Lima Bancshares, Inc.,
Lima, Illinois
National Bank of Greece, S.A.
Athens, Greece
NBG International Limited,
London, England
National Commerce Bancorporation,
Memphis, Tennessee
Memphis, Tennessee
First Merc.com,
Memphis, Tennessee
Legal Developments
619
Section 4—Continued
Applicant(s)
Nonbanking Activity/Company
Reserve Bank
Effective Date
Private Bancorp, Inc.,
Chicago, Illinois
SVB&T Corporation,
French Lick, Indiana
The PrivateBank,
St. Louis, Missouri
Independent Bankers Life Reinsurance
Company of Indiana, Ltd.,
Phoenix, Arizona
Phoenix Investment Management
Company, Inc.,
Providence, Rhode Island
Chicago
June 14, 2000
St. Louis
June 15, 2000
Boston
June 2, 2000
Washington Trust Bancorp, Inc.
Westerly, Rhode Island
APPLICATIONS APPROVED UNDER BANK MERGER ACT
By the Secretary
of the
Board
Recent applications have been approved by the Secretary of the Board as listed below. Copies are available upon request to
the Freedom of Information Office, Office of the Secretary, Board of Governors of the Federal Reserve System,
Washington, D.C. 20551.
Applicant(s)
Bank(s)
Reserve Bank
Old Kent Bank,
Grand Rapids, Michigan
Grand Premier Trust and Investment,
Inc., National Association,
Freeport, Illinois
June 29, 2000
By Federal
Reserve
Effective Date
Banks
Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon request to
the Reserve Banks.
Applicant(s)
Bank(s)
Reserve Bank
Effective Date
Banco Popular North America,
New York, New York
Bank of Orange County,
Fountain Valley, California
Effingham State Bank,
Effingham, Illinois
F&M Bank-Highlands,
Covington, Virginia
F&M Bank-Massanutten,
Harrisonburg, Virginia
F&M Bank-Winchester,
Winchester, Virginia
First Liberty Bank and Trust,
Jermyn, Pennsylvania
Mid State Bank,
Newberry, South Carolina
Aurora National Bank,
Aurora, Illinois
CalWest Bank,
Torrance, California
Centralia Savings Bank
Centralia, Illinois
Wachovia Bank, National Association,
Winston-Salem, North Carolina
Wachovia Bank, National Association,
Winston-Salem, North Carolina,
Wachovia Bank, National Association,
Winston-Salem, North Carolina
Mellon Bank, N.A.,
Pittsburgh, Pennsylvania
The Anchor Bank,
Myrtle Beach, South Carolina
Carolina First Bank,
Greenville, South Carolina
New York
June 6, 2000
San Francisco
May 25, 2000
St. Louis
June 6, 2000
Richmond
June 15, 2000
Richmond
June 15, 2000
Philadelphia
May 15,2000
Richmond
June 5, 2000
620
Federal Reserve Bulletin • August 2000
B y Federal Reserve Banks—Continued
Applicant(s)
Bank(s)
Reserve Bank
Effective Date
Pinnacle Bank,
Papillion, Nebraska
National Bank of Commerce Trust &
Savings Association-NBC Parkway
Branch,
Lincoln, Nebraska
First National Bank of Southwestern,
Ohio
Hamilton, Ohio
Santa Barbara Bank & Trust,
Santa Barbara, California
Los Robles Bank,
Thousand Oaks, California
United Valley Bank,
Estes Park, Colorado
Kansas City
June 9, 2000
San Francisco
June 13, 2000
Kansas City
June 5, 2000
Peoples Bank and Trust Company,
Sunman, Indiana
WestStar Bank,
Vail, Colorado
PENDING CASES INVOLVING THE BOARD OF GOVERNORS
This list of pending cases does not include suits against the
Federal Reserve Banks in which the Board of Governors is not
named a party.
Mann v. Greenspan, No. CIV-00-754-C (W.D. Okl., filed
April 18, 2000). Employment discrimination action by employee of Federal Reserve bank. On May 10, 2000, the
plaintiff voluntarily dismissed the Board as a party.
Bettersworth v. Board of Governors, No. 00-50262 (5th Cir.,
filed April 14, 2000). Appeal of district court's dismissal of
Privacy Act claims.
Hunter v. Board of Governors, No. 00-CV-735 (ESH) (D.D.C.,
filed April 5, 2000). Action claiming retaliation for whistleblowing activity.
Albrecht v. Board of Governors, No. 00-CV-317 (CKK)
(D.D.C., filed February 18, 2000). Action challenging the
funding of the retirement plan for certain Board employees.
Board of Governors v. Interfinancial Services, Ltd., No. 00-75
(RCL) (D.D.C., filed February 9, 2000). Action to enforce
administrative subpoena issued by the Board. On June 20,
2000, the court granted the Board's petition to enforce and
ordered production of the requested documents.
Toland v. Internal Revenue Service, Federal Reserve System,
et al., No. CV-S-99-1769-JBR-RJJ (D. Nevada, filed December 29, 1999). Challenge to income taxation and Federal Reserve notes. On February 16, 2000, the government
filed a motion to dismiss the action.
Irontown Housing Corp. v. Board of Governors, No. 99-9549
(10th Cir., filed December 27, 1999). Petition for review of
Board order dated December 13, 1999, approving the
merger of Zions Bancorporation with First Security Corporation.
Artis v. Greenspan, No. 1:99CV02073 (EGS) (D.D.C., filed
August 3, 1999). Employment discrimination action.
Sheriff Gerry Ali v. U.S. State Department, No. 99-7438 (C.D.
Cal., filed July 21, 1999). Action relating to impounded
bank drafts.
Kerr v. Department of the Treasury, No. 99-16263 (9th Cir.,
filed April 28, 1999). Appeal of dismissal of action challenging income taxation and Federal Reserve notes.
Sedgwick v. Board of Governors, No. Civ. 99-0702 (D. Arizona, filed April 14, 1999). Action under Federal Tort
Claims Act alleging violation of bank supervision requirements. The Board filed a motion to dismiss on June 15,
1999.
Hunter v. Board of Governors, No. 1:98CV02994 (ESH)
(D.D.C., filed December 9, 1998). Action under the Freedom of Information Act, the Privacy Act, and the first
amendment. On April 26, 2000, the court granted the
Board's motion to dismiss or for summary judgment.
Folstad v. Board of Governors, No. 00-1056 (6th Cir., filed
January 14, 2000). Appeal of district court order granting
summary judgment to the Board in a Freedom of Information Act case.
Fraternal Order of Police v. Board of Governors, No.
1:98CV03116 (WBB)(D.D.C„ filed December 22, 1998).
Declaratory judgment action challenging Board labor practices. On February 26, 1999, the Board filed a motion to
dismiss the action.
Board of Governors v. Carrasco, No. 98 Civ. 3474 (LAK)
(S.D.N.Y., filed May 15, 1998). Action to freeze assets of
individual pending administrative adjudication of civil
money penalty assessment by the Board. On May 26, 1998,
the court issued a preliminary injunction restraining the
transfer or disposition of the individual's assets and appointing the Federal Reserve Bank of New York as receiver for
those assets. Following entry of the Board's order requiring
restitution, 85 Federal Reserve Bulletin 142 (1998), the
court granted the Board's motion for judgment in the asset
Legal Developments
freeze action and authorized a judicial sale of the seized
property.
Board of Governors v. Pharaon, No. 98-6101 (2d Cir., filed
May 4, 1998). Appeal and cross-appeal of district court
order granting in part and denying in part the Board's
motion for summary judgment seeking prejudgment interest
and a statutory surcharge in connection with a civil money
penalty assessed by the Board. On February 24, 1999, the
court granted the Board's appeal and denied the crossappeal, and remanded the matter to the district court for
determination of prejudgment interest due to the Board.
621
Michaelessi, a former employee and institution-affiliated
party of the Rochester Branch of The Bank of N e w York,
N e w York, N e w York.
WRITTEN AGREEMENTS APPROVED BY FEDERAL
RESERVE BANKS
Banco Bilbao Vizcaya Argentaria, S.A.
Madrid, Spain
The Federal Reserve Board announced on June 23, 2000,
the execution of a Written Agreement by and among
FINAL ENFORCEMENT ORDERS ISSUED BY THE BOARD Banco Bilbao Vizcaya Argentaria, S.A., Madrid, Spain;
OF GOVERNORS
Banco Bilbao Vizcaya, S.A. Miami Agency, Miami, Florida; Banco Bilbao Vizcaya, S.A. N e w York Branch, N e w
Lawrence Michaelessi
York, New York; the Federal Reserve Bank of Atlanta; the
New York, New York
Federal Reserve Bank of N e w York; the N e w York State
Banking Department; and the State of Florida Department
The Federal Reserve Board announced on June 14, 2000,
of Banking and Finance.
the issuance of an Order of Prohibition against Lawrence
622
Federal Reserve Bulletin • August 2000
A1
Financial and Business Statistics
A3
DOMESTIC FINANCIAL STATISTICS
Money Stock and Bank Credit
A4
A5
A6
Reserves, money stock, and debt measures
Reserves of depository institutions and Reserve Bank
credit
Reserves and borrowings—Depository
institutions
Policy Instruments
A7
A8
A9
Federal Finance—Continued
GUIDE TO TABULAR PRESENTATION
Federal Reserve Bank interest rates
Reserve requirements of depository institutions
Federal Reserve open market transactions
Federal Reserve Banks
A 1 0 Condition and Federal Reserve note statements
A l l Maturity distribution of loan and security
holding
All
Gross public debt of U.S. Treasury—
Types and ownership
A28 U.S. government securities
dealers—Transactions
A29 U.S. government securities dealers—
Positions and financing
A30 Federal and federally sponsored credit
agencies—Debt outstanding
Securities Markets and Corporate Finance
A31 New security issues—Tax-exempt state and local
governments and corporations
A3 2 Open-end investment companies—Net sales
and assets
A 3 2 Corporate profits and their distribution
A 3 2 Domestic finance companies—Assets and liabilities
A3 3 Domestic finance companies—Owned and managed
receivables
Real Estate
Monetary and Credit Aggregates
A 1 2 Aggregate reserves of depository institutions
and monetary base
A13 Money stock and debt measures
Commercial Banking Institutions—
Assets and Liabilities
A15
A16
A17
A19
A20
All commercial banks in the United States
Domestically chartered commercial banks
Large domestically chartered commercial banks
Small domestically chartered commercial banks
Foreign-related institutions
A34 Mortgage markets—New homes
A35 Mortgage debt outstanding
Consumer Credit
A3 6 Total outstanding
A36 Terms
Flow of Funds
A37
A39
A40
A41
Funds raised in U.S. credit markets
Summary of financial transactions
Summary of credit market debt outstanding
Summary of financial assets and liabilities
Financial Markets
DOMESTIC NONFINANCIAL STATISTICS
All
Commercial paper and bankers dollar
acceptances outstanding
A 2 2 Prime rate charged by banks on short-term
business loans
A23 Interest rates—Money and capital markets
A24 Stock market—Selected statistics
Federal Finance
A25 Federal fiscal and financing operations
A26 U.S. budget receipts and outlays
All Federal debt subject to statutory limitation
Selected Measures
A42
A42
A43
A44
A46
A47
A48
A49
Nonfinancial business activity
Labor force, employment, and unemployment
Output, capacity, and capacity utilization
Industrial production—Indexes and gross value
Housing and construction
Consumer and producer prices
Gross domestic product and income
Personal income and saving
2
Federal Reserve Bulletin • August 2000
INTERNATIONAL STATISTICS
Summary Statistics
A50
A51
A51
A51
U.S. international transactions
U.S. foreign trade
U.S. reserve assets
Foreign official assets held at Federal Reserve
Banks
A 5 2 Selected U.S. liabilities to foreign official
institutions
Reported by Banks in the United States
A52
A53
A55
A56
Liabilities to, and claims on, foreigners
Liabilities to foreigners
Banks' own claims on foreigners
Banks' own and domestic customers' claims on
foreigners
A56 Banks' own claims on unaffiliated foreigners
A57 Claims on foreign countries—Combined
domestic offices and foreign branches
Reported by Nonbanking Business
Enterprises in the United States
A58 Liabilities to unaffiliated foreigners
A59 Claims on unaffiliated foreigners
Securities Holdings and Transactions
A60 Foreign transactions in securities
A61 Marketable U.S. Treasury bonds and
notes—Foreign transactions
Interest and Exchange Rates
A62 Foreign exchange rates
A63 GUIDE TO STATISTICAL RELEASES AND
SPECIAL TABLES
SPECIAL TABLES
A64 Assets and liabilities of commercial banks,
March 31, 2000
A66 Terms of lending at commercial banks, May 2000
A 7 2 Assets and liabilities of U.S. branches and
agencies of foreign banks, March 31, 2000
A76 Pro forma balance sheet and income statements
for priced service operations, March 31, 2000
A78 INDEX TO STATISTICAL TABLES
A3
Guide to Tabular Presentation
SYMBOLS AND ABBREVIATIONS
c
e
n.a.
P
r
*
0
ATS
BIF
CD
CMO
CRA
FFB
FHA
FHLBB
FHLMC
FmHA
FNMA
FSLIC
G-7
G-10
Corrected
Estimated
Not available
Preliminary
Revised (Notation appears on column heading
when about half of the figures in that column
are changed.)
Amounts insignificant in terms of the last decimal
place shown in the table (for example, less than
500,000 when the smallest unit given is millions)
Calculated to be zero
Cell not applicable
Automatic transfer service
Bank insurance fund
Certificate of deposit
Collateralized mortgage obligation
Community Reinvestment Act of 1977
Federal Financing Bank
Federal Housing Administration
Federal Home Loan Bank Board
Federal Home Loan Mortgage Corporation
Farmers Home Administration
Federal National Mortgage Association
Federal Savings and Loan Insurance Corporation
Group of Seven
Group of Ten
GNMA
GDP
HUD
IMF
10
IPCs
IRA
MMDA
MSA
NOW
OCD
OPEC
OTS
PMI
PO
REIT
REMIC
RHS
RP
RTC
SCO
SDR
SIC
VA
Government National Mortgage Association
Gross domestic product
Department of Housing and Urban
Development
International Monetary Fund
Interest only
Individuals, partnerships, and corporations
Individual retirement account
Money market deposit account
Metropolitan statistical area
Negotiable order of withdrawal
Other checkable deposit
Organization of Petroleum Exporting Countries
Office of Thrift Supervision
Private mortgage insurance
Principal only
Real estate investment trust
Real estate mortgage investment conduit
Rural Housing Service
Repurchase agreement
Resolution Trust Corporation
Securitized credit obligation
Special drawing right
Standard Industrial Classification
Department of Veterans Affairs
GENERAL INFORMATION
In many of the tables, components do not sum to totals because of
rounding.
Minus signs are used to indicate (1) a decrease, (2) a negative
figure, or (3) an outflow.
"U.S. government securities" may include guaranteed issues
of U.S. government agencies (the flow of funds figures also
include not fully guaranteed issues) as well as direct obligations of the Treasury.
"State and local government" also includes municipalities,
special districts, and other political subdivisions.
A4
1.10
DomesticNonfinancialStatistics • August 2000
RESERVES, MONEY STOCK, A N D DEBT MEASURES
Percent annual rate of change, seasonally adjusted1
1999
2000
2000
Monetary or credit aggregate
Q3r
Q4r
Ql r
Jan.r
Feb.r
Mar.r
Apr.
May
-9.1'
-9.2'
-9.9'
9.2'
-16.1
-16.0
-17.9
9.0
-3.4
-4.5
-3.0
20.4
1.8
.0
2.4
4.2
39.4
19.4
38.2
1.6
-41.1
-16.6
-34.0
-37.6
-34.1
-37.8
-36.2
-4.7
13.8
16.0
10.2
2.7
12.8
18.7
11.1
2.1
2.1
6.0
6.0
7.1r
-1.8
5.3
5.0
6.2
4.8
5.1
10.1
6.4
.4
6.0
10.5
5.9
-3.7
6.2
8.2
6.1
-14.7
3.1
3.3
4.5
6.9
9.4
13.4
7.1
4.4
10.3
7.8
5.4
-12.3
-1.0
3.7
n.a.
7.3
5.9
7.6
4.0
5.3
23.7
7.8
22.4
9.3
13.4
8.6
3.8
10.2
23.5
12.1
1.5
2.5
15.4
10.7
-2.1r
-.9
10.6
2.1
.3
4.2
7.0
38.6
3.6
9.1
22.6
2.4
8.1
8.4
12.8
10.1
3.5
6.5
10.6
13.7
14.8
17.7
32.7
-2.7
13.3
9.1
14.5
-6.3
-4.3r
13.3
-3.2
1.6
-3.3
5.0
6.0
-1.4
6.4
18.2
-4.0
9.0
36.7
6.4
3.0
8.9
7.2
3.7
1.3
-8.0
-1.8
-6.3
10.7
8.1
-15.2
11.4r
14.1
8.2
9.3
10.5
21.4
18.7
23.5
27.9
31.8
4.3
-11.5
19.7
45.1
19.1
-1.3
-3.9
17.3
9.1
-9.7
12.8
13.3
17.5
29.2
-19.0
17.3
50.3
-30.0
-12.9
65.0
-17.7
-55.1
24.0
30.6
-.3
8.0
-4.3
9.4
-4.4
8.7
-4.4
8.9
-12.1
8.9
3.1
8.1
-5.5
8.2
institutions2
1
2
3
4
Reserves of depository
Total
Required
Nonborrowed
Monetary base3
5
6
7
8
Concepts of money and debt4
Ml
M2
M3
Debt
Nontransaction
9 In M25
10 In M3 only 6
Q2
components
Time and savings deposits
Commercial banks
Savings, including MMDAs
Small time7
Large time8,9
Thrift institutions
14
Savings, including MMDAs
15
Small time7
16
Large time8
11
12
13
Money market mutual funds
17 Retail
18 Institution-only
Repurchase agreements and Eurodollars
19 Repurchase agreements10
20 Eurodollars10
-1.2
21.7
Debt components4
21 Federal
22 Nonfederal
-2.3
9.8r
1. Unless otherwise noted, rates of change are calculated from average amounts outstanding during preceding month or quarter.
2. Figures incorporate adjustments for discontinuities, or "breaks," associated with
regulatory changes in reserve requirements. (See also table 1.20.)
3. The seasonally adjusted, break-adjusted monetary base consists of (1) seasonally
adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally adjusted currency
component of the money stock, plus (3) (for all quarterly reporters on the "Report of
Transaction Accounts, Other Deposits and Vault Cash" and for all weekly reporters whose
vault cash exceeds their required reserves) the seasonally adjusted, break-adjusted difference
between current vault cash and the amount applied to satisfy current reserve requirements.
4. Composition of the money stock measures and debt is as follows:
Ml: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of
depository institutions, (2) travelers checks of nonbank issuers, (3) demand deposits at all
commercial banks other than those owed to depository institutions, the U.S. government, and
foreign banks and official institutions, less cash items in the process of collection and Federal
Reserve float, and (4) other checkable deposits (OCDs), consisting of negotiable order of
withdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions,
credit union share draft accounts, and demand deposits at thrift institutions. Seasonally
adjusted Ml is computed by summing currency, travelers checks, demand deposits, and
OCDs, each seasonally adjusted separately.
M2: Ml plus (1) savings (including MMDAs), (2) small-denomination time deposits (time
deposits—including retail RPs—in amounts of less than $100,000), and (3) balances in retail
money market mutual funds. Excludes individual retirement accounts (IRAs) and Keogh
balances at depository institutions and money market funds. Seasonally adjusted M2 is
calculated by summing savings deposits, small-denomination time deposits, and retail money
fund balances, each seasonally adjusted separately, and adding this result to seasonally
adjusted Ml.
M3: M2 plus (1) large-denomination time deposits (in amounts of $100,000 or more), (2)
balances in institutional money funds, (3) RP liabilities (overnight and term) issued by all
n.a.
n.a.
depository institutions, and (4) Eurodollars (overnight and term) held by U.S. residents at
foreign branches of U.S. banks worldwide and at all banking offices in the United Kingdom
and Canada. Excludes amounts held by depository institutions, the U.S. government, money
market funds, and foreign banks and official institutions. Seasonally adjusted M3 is calculated
by summing large time deposits, institutional money fund balances, RP liabilities,
and Eurodollars, each seasonally adjusted separately, and adding this result to seasonally
adjusted M2.
Debt: The debt aggregate is the outstanding credit market debt of the domestic nonfinancial
sectors—the federal sector (U.S. government, not including government-sponsored enterprises or federally related mortgage pools) and the nonfederal sectors (state and local
governments, households and nonprofit organizations, nonfinancial corporate and nonfarm
noncorporate businesses, and farms). Nonfederal debt consists of mortgages, tax-exempt and
corporate bonds, consumer credit, bank loans, commercial paper, and other loans. The data,
which are derived from the Federal Reserve Board's flow of funds accounts, are breakadjusted (that is, discontinuities in the data have been smoothed into the series) and
month-averaged (that is, the data have been derived by averaging adjacent month-end levels).
5. Sum of (1) savings deposits (including MMDAs), (2) small time deposits, and (3) retail
money fund balances, each seasonally adjusted separately.
6. Sum of (1) large time deposits, (2) institutional money fund balances, (3) RP liabilities
(overnight and term) issued by depository institutions, and (4) Eurodollars (overnight and
term) of U.S. addressees, each seasonally adjusted separately.
7. Small time deposits—including retail RPs—are those issued in amounts of less than
$100,000. All IRA and Keogh account balances at commercial banks and thrift institutions
are subtracted from small time deposits.
8. Large time deposits are those issued in amounts of $100,000 or more, excluding those
booked at international banking facilities.
9. Large time deposits at commercial banks less those held by money market funds,
depository institutions, the U.S. government, and foreign banks and official institutions.
10. Includes both overnight and term.
Money Stock and Bank Credit
1.11
A5
RESERVES OF DEPOSITORY INSTITUTIONS AND RESERVE BANK CREDIT 1
Millions of dollars
Average of
daily figures
Average of daily figures for week ending on date indicated
2000
2000
Mar.
Apr.
May
Apr. 19
Apr. 26
May 3
May 10
May 17
May 24
May 31
555,405
560,803
558,972
559,654
563,987
568,537
560,589
556,395
552,655
560,284
501,572
0
505,256
0
507,413
0
507,438
0
507,391
0
506,650
0
507,745
0
508,353
0
507,682
0
506,191
0
150
0
20,177
0
143
0
19,920
0
140
0
17,303
0
140
0
16,624
0
140
0
20,477
0
140
0
26,499
0
140
0
17,093
0
140
0
14,323
0
140
0
11,116
0
140
0
20,913
0
94
70
7
0
102
33,233
181
117
0
0
303
34,884
99
280
0
0
404
33,333
55
103
0
0
238
35,056
81
133
0
0
590
35,176
157
179
0
0
216
34,696
63
216
0
0
587
34,746
66
260
0
0
-360
33,614
154
324
0
0
1,140
32,099
46
356
0
0
196
32,442
11,048
6,200
28,889
11,048
5,733
29,080
11,048
5,200
29,194
11,048
5,771
29,083
11,048
5,200
29,122
11,048
5,200
29,162
11,048
5,200
29,176
11,048
5,200
29,190
11,048
5,200
29,204
11,048
5,200
29,218
563,591
0
165
564,570
0
196
565,667
0
198
564,850
0
198
564,346
0
201
564,410
0
203
564,699
0
205
565,052
0
205
564,792
0
204
568,367
0
177
5,344
96
6,866
201
19,071
6,208
8,395
106
6,836
272
19,357
6,932
7,060
95
6,836
250
16,265
8,044
6,778
91
6,775
274
19,269
7,321
12,417
90
6,802
297
19,241
5,964
14,439
127
6,804
268
18,622
9,077
9,068
86
6,967
261
18,116
6,611
5,424
121
6,858
254
15,291
8,629
5,114
78
6,786
253
15,339
5,540
4,880
82
6,746
217
15,356
9,925
May 17
May 24
May 31
SUPPLYING RESERVE FUNDS
1 Reserve Bank credit outstanding
U.S. government securities
2
Bought outright—System account 3
3
Held under repurchase agreements
Federal agency obligations
4
Bought outright
5
Held under repurchase agreements
6
Repurchase agreements—triparty4
7
Acceptances
Loans to depository institutions
8
Adjustment credit
9
Seasonal credit
10
Special Liquidity Facility credit
11
Extended credit
12
Float
13
Other Federal Reserve assets
14 Gold stock
15 Special drawing rights certificate account
16 Treasury currency outstanding
ABSORBING RESERVE FUNDS
17 Currency in circulation
... .
18 Reverse repurchase agreements—triparty . . .
19 Treasury cash holdings
Deposits, other than reserve balances, with
Federal Reserve Banks
20
Treasury
21
Foreign
22
Service-related balances and adjustments . .
23
Other
24 Other Federal Reserve liabilities and capital v
25 Reserve balances with Federal Reserve Banks5
Wednesday figures
End-of-month figures
Apr. 19
Apr. 26
May 3
566,932
567,423
583,512
574,307
558,160
553,915
555,216
566,932
506,744
0
508,029
0
507,776
0
507,137
0
508,459
0
507,916
0
509,115
0
506,744
0
140
0
24,905
0
140
0
26,395
0
140
0
23,775
0
140
0
39,780
0
140
0
32,515
0
140
0
14,175
0
140
0
14,620
0
140
0
12,530
0
140
0
26,395
0
157
79
0
0
-213
34,183
78
162
0
0
-237
34,810
88
344
0
0
840
32,381
86
119
0
0
112
35,162
123
162
0
0
184
35,348
46
212
0
0
-125
34,381
45
234
0
0
234
34,873
146
285
0
0
-1,089
31,897
128
356
0
0
634
32,313
88
344
0
0
840
32,381
11,048
6,200
20,003
11,048
5,200
29,162
11,048
5,200
29,218
11,048
5,200
29,083
11,048
5,200
29,122
11,048
5,200
29,162
11,048
5,200
29,176
11,048
5,200
29,190
11,048
5,200
29,204
11,048
5,200
29,218
563,200
0
174
563,640
0
203
570,064
0
140
565,586
0
201
565,332
0
203
565,492
0
205
566,060
0
205
565,677
0
207
566,599
0
183
570,069
0
140
4,357
125
7,066 r
188
19,752
11,198
15,868
142
6,804
251
18,558
6,498
5,445
110
6,746
226
15,271
14,390
5,672
137
6,775
276
18,961
15,146
29,444
79
6,802
276
18,906
7,843
8,027
71
6,804
263
18,266
20,588
9,769
72
6,967
263
14,986
5,263
4,923
126
6,858
260
15,009
6,294
4,942
76
6,786
249
15,019
6,814
5,445
110
6,746
226
15,271
14,390
Apr.
May
559,809
566,553
501,708
0
506,695
0
150
0
23,745
0
Mar.
May 10
SUPPLYING RESERVE FUNDS
1 Reserve Bank credit outstanding
U.S. government securities2
2
Bought outright—System account 3
3
Held under repurchase agreements
Federal agency obligations
4
Bought outright
5
Held under repurchase agreements
6
Repurchase agreements—triparty4
7
Acceptances
Loans to depository institutions
8
Adjustment credit
9
Seasonal credit
10
Special Liquidity Facility credit
11
Extended credit
12
Float
13
Other Federal Reserve assets
14 Gold stock
15 Special drawing rights certificate account
16 Treasury currency outstanding
ABSORBING RESERVE FUNDS
17 Currency in circulation
.. . .
18 Reverse repurchase agreements—triparty . . .
19 Treasury cash holdings
Deposits, other than reserve balances, with
Federal Reserve Banks
20
Treasury
21
Foreign
22
Service-related balances and adjustments . .
23
Other
24 Other Federal Reserve liabilities and capital .
25 Reserve balances with Federal Reserve Banks'
1. Amounts of cash held as reserves are shown in table 1.12, line 2.
2. Includes securities loaned—fully guaranteed by U.S. government securities pledged
with Federal Reserve Banks—and excludes securities sold and scheduled to be bought back
under matched sale-purchase transactions.
3. Includes compensation that adjusts for the effects of inflation on the principal of
inflation-indexed securities.
4. Cash value of agreements arranged through third-party custodial banks. These agreements are collateralized by U.S. government and federal agency securities.
5. Excludes required clearing balances and adjustments to compensate for float,
A6
DomesticNonfinancialStatistics • August 2000
1.12
RESERVES A N D BORROWINGS
Depository Institutions 1
Millions of dollars
Prorated monthly averages of biweekly averages
Reserve classification
1
2
3
4
5
6
7
8
9
10
11
12
Reserve balances with Reserve Banks2
Total vault cash3
Applied vault cash4
Surplus vault cash5
Total reserves6
Required reserves
Excess reserve balances at Reserve Banks7
Total borrowing at Reserve Banks
Adjustment
Seasonal
Special Liquidity Facility8
Extended credit9
1997
1998
Dec.
Dec.
r
10,664
44,742
37,255
7,486
47,919r
46,235
1,685
324
245
79
0
0
9,026
44,294
36,183
8,111
45,209
43,695
1,514
117
101
15
0
0
1999r
1999
2000
r
Dec.'
Nov.
Dec.
Jan.
Feb/
Mar.r
Apr.
May
5,263
60,630
36,392
24,238
41,655
40,347
1,308
320
179
67
74
0
6,283
50,830
34,688
16,142
40,970
39,641
1,330
236
157
71
7
0
5,263
60,630
36,392
24,238
41,655
40,347
1,308
320
179
67
74
0
5,169
74,015
39,063
34,952
44,232
42,207
2,025
374
296
31
46
0
5,078
63,764
37,017
26,747
42,095
40,982
1,113
108
45
44
19
0
6,515
48,946
33,227
15,719
39,742
38,533
1,209
179
101
71
7
0
7,078
46,453
33,507
12,946
40,584
39,433
1,152
304
184
120
0
0
7,660
44,632
33,895
10,737
41,555
40,590
965
362
86
276
0
0
Biweekly averages of daily figures for two week periods ending on dates indicated
2000
1
2
3
4
5
6
7
8
9
10
11
12
Reserve balances with Reserve Banks2
Total vault cash3
Applied vault cash4
Surplus vault cash5
Total reserves6
Required reserves
Excess reserve balances at Reserve Banks7
Total borrowing at Reserve Banks
Adjustment
Seasonal
Special Liquidity Facility8
Extended credit9
Jan. 26r
Feb. 9r
Feb. 23r
Mar. 8r
Mar. 22r
Apr. 5r
Apr. 19
May 3r
May 17
May 31
4,543
75,869
40,024
35,845
44,567
43,177
1,390
224
180
28
17
0
4,156
80,833
40,353
40,480
44,509
43,361
1,148
114
62
27
25
0
5,176
58,800
36,272
22,528
41,448
40,279
1,169
100
35
48
17
0
6,234
49,743
33,751
15,992
39,985
39,054
931
119
44
61
15
0
6,245
48,706
32,862
15,844
39,107
38,011
1,095
207
133
67
7
0
7,186
48,613
33,330
15,283
40,516
38,883
1,632
189
104
85
0
0
6,715
47,144r
32,885
14,259r
39,600
38,516
1,083
368
264
104
0
0
7,491
44,592
34,378
10,214
41,869
40,849
1,019
276
120
156
7,614
44,114
33,227
10,887
40,841
39,929
912
303
65
238
7,743
45,158
34,459
10,699
42,202
41,196
1,006
440
100
340
0
0
0
1. Data in this table also appear in the Board's H.3 (502) weekly statistical release. For
ordering address, see inside front cover. Data are not break-adjusted or seasonally adjusted.
2. Excludes required clearing balances and adjustments to compensate for float and
includes other off-balance-sheet "as-of' adjustments.
3. Vault cash eligible to satisfy reserve requirements. It includes only vault cash held by
those banks and thrift institutions that are not exempt from reserve requirements. Dates refer
to the maintenance periods in which the vault cash can be used to satisfy reserve requirements.
4. All vault cash held during the lagged computation period by "bound" institutions (that
is, those whose required reserves exceed their vault cash) plus the amount of vault cash
applied during the maintenance period by "nonbound" institutions (that is, those whose vault
cash exceeds their required reserves) to satisfy current reserve requirements.
5. Total vault cash (line 2) less applied vault cash (line 3).
6. Reserve balances with Federal Reserve Banks (line 1) plus applied vault cash
(line 3).
7. Total reserves (line 5) less required reserves (line 6).
8. Borrowing at the discount window under the terms and conditions established for the
Century Date Change Special Liquidity Facility in elfect from October 1, 1999 through
April 7, 2000.
9. Consists of borrowing at the discount window under the terms and conditions established for the extended credit program to help depository institutions deal with sustained
liquidity pressures. Because there is not the same need to repay such borrowing promptly as
with traditional short-term adjustment credit, the money market elfect of extended credit is
similar to that of nonborrowed reserves.
Policy Instruments
1.14
A7
FEDERAL RESERVE B A N K INTEREST RATES
Percent per year
Current and previous levels
Seasonal credit2
Adjustment credit
Federal Reserve
Bank
On
7/7/00
Extended credit"
On
7/7/00
Boston
New York . . .
Philadelphia .
Cleveland . ..
Richmond . ..
Atlanta
5/16/00
5/19/00
5/18/00
5/16/00
5/16/00
5/17/00
Chicago
St. Louis
Minneapolis .
Kansas City . .
Dallas
San Francisco
5/17/00
5/18/00
5/18/00
5/17/00
5/17/00
5/16/00
On
7/7/00
6/15/00
Range of rates for adjustment credit in recent years4
Range (or
level)—All
F.R. Banks
F.R. Bank
of
N.Y.
9
20
11
12
3
10
21
22
16
20
1
3
6-6.5
6.5
6.5-7
7
7-7.25
7.25
7.75
8
8-8.5
8.5
8.5-9.5
9.5
6.5
6.5
7
7
7.25
7.25
7.75
8
8.5
8.5
9.5
9.5
1979—July 20
Aug. 17
20
Sept. 19
21
Oct. 8
10
10
10-10.5
10.5
10.5-11
11
12
12
12
1980—Feb. 15
19
May 29
30
June 13
16
July 28
29
Sept. 26
Nov. 17
Dec. 5
8
12-13
13
12-13
12
11-12
11
10-11
10
11
12
12-13
13
13
13
13
12
11
11
10
10
11
12
13
13
1981—May
5
13-14
Nov.
2
6
4
14
13-14
13
12
14
14
13
13
12
In effect Dec. 31, 1977
1978—Jan.
May
July
Aug.
Sept.
Oct.
Nov.
Dec.
1982—July 20
23
Aug. 2
3
16
27
30
11-12
11.5-12
11.5
11-11.5
11
10.5
10-10.5
10
10
10.5
10.5
11
11
11.5
11.5
11
11
10.5
10
10
Range (or
level)—All
F.R. Banks
F.R. Bank
of
N.Y.
1982—Oct. 12
13
Nov. 22
26
Dec. 14
15
17
9.5-10
9.5
9-9.5
9
8.5-9
8.5-9
8.5
9.5
9.5
9
9
9
8.5
8.5
1984—Apr.
9
13
Nov. 21
26
Dec. 24
8.5-9
9
8.5-9
8.5
9
9
8.5
8.5
1985—May 20
24
7.5-8
7.5
7.5
7.5
1986—Mar.
7-7.5
7
6.5-7
6.5
6
5.5-6
5.5
7
7
6.5
6.5
6
5.5
5.5
11
5.5-6
6
6
6
9
11
6-6.5
6.5
6.5
6.5
1989—Feb. 24
27
6.5-7
7
7
7
F.R. Bank
of
N.Y.
3-3.5
3.5
3.5-4
4
4-4.75
4.75
3.5
3.5
4
4
4.75
4.75
1
9
4.75-5.25
5.25
5.25
5.25
1996—Jan. 31
Feb. 5
5.00-5.25
5.00
5.00
5.00
1998—Oct. 15
16
Nov. 17
19
4.75-5.00
4.75
4.50-4.75
4.50
4.75
4.75
4.50
4.50
1999—Aug. 24
26
Nov. 16
18
4.50-4.75
4.75
4.75-5.00
5.00
4.75
4.75
4.75
5.00
2000—Feb.
5.00-5.25
5.25
5.25-5.50
5.50
5.50-6.00
6.00
5.25
5.25
5.50
5.50
5.50
6.00
6.00
6.00
1994—May 17
18
Aug. 16
18
Nov. 15
17
1995—Feb.
7
10
Apr. 21
23.
July 11
Aug. 21
22
1987—Sept.
1988—Aug.
4
8
8
2
4
Mar. 21
23
May 16
19
In effect July 7, 2000
1990—Dec. 19
1991—Feb.
Apr.
May
Sept.
Nov.
Dec.
1992—July
6.5
6.5
1
4
30
2
13
17
6
7
20
24
6-6.5
6
5.5-6
5.5
5-5.5
5
4.5-5
4.5
3.5-1.5
3.5
6
6
5.5
5.5
5
5
4.5
4.5
3.5
3.5
2
7
3-3.5
3
1. Available on a short-term basis to help depository institutions meet temporary needs for
funds that cannot be met through reasonable alternative sources. The highest rate established
for loans to depository institutions may be charged on adjustment credit loans of unusual size
that result from a major operating problem at the borrower's facility.
2. Available to help relatively small depository institutions meet regular seasonal needs for
funds that arise from a clear pattern of intrayearly movements in their deposits and loans and
that cannot be met through special industry lenders. The discount rate on seasonal credit takes
into account rates charged by market sources of funds and ordinarily is reestablished on the
first business day of each two-week reserve maintenance period; however, it is never less than
the discount rate applicable to adjustment credit.
3. May be made available to depository institutions when similar assistance is not
reasonably available from other sources, including special industry lenders. Such credit may
be provided when exceptional circumstances (including sustained deposit drains, impaired
access to money market funds, or sudden deterioration in loan repayment performance) or
practices involve only a particular institution, or to meet the needs of institutions experiencing
difficulties adjusting to changing market conditions over a longer period (particularly at times
of deposit disintermediation). The discount rate applicable to adjustment credit ordinarily is
charged on extended-credit loans outstanding less than thirty days; however, at the discretion
Range (or
level)—All
F.R. Banks
Effective date
3
3
of the Federal Reserve Bank, this time period may be shortened. Beyond this initial period, a
flexible rate somewhat above rates charged on market sources of funds is charged. The rate
ordinarily is reestablished on the first business day of each two-week reserve maintenance
period, but it is never less than the discount rate applicable to adjustment credit plus 50 basis
points.
4. For earlier data, see the following publications of the Board of Governors: Banking and
Monetary Statistics, 1914-1941, and 1941-1970; and the Annual Statistical Digest, 19701979.
In 1980 and 1981, the Federal Reserve applied a surcharge to short-term adjustment-credit
borrowings by institutions with deposits of $500 million or more that had borrowed in
successive weeks or in more than four weeks in a calendar quarter. A 3 percent surcharge was
in effect from Mar. 17, 1980, through May 7, 1980. A surcharge of 2 percent was reimposed
on Nov. 17, 1980; the surcharge was subsequently raised to 3 percent on Dec. 5, 1980, and to
4 percent on May 5, 1981. The surcharge was reduced to 3 percent effective Sept. 22, 1981,
and to 2 percent effective Oct. 12, 1981. As of Oct. 1, 1981, the formula for applying the
surcharge was changed from a calendar quarter to a moving thirteen-week period. The
surcharge was eliminated on Nov. 17, 1981.
A8
DomesticNonfinancialStatistics • August 2000
1.15
RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS 1
Type of deposit
1
2
Net transaction accounts
$0 million-$44.3 million 3 .
More than $44.3 million4 .
12/30/99
12/30/99
3
Nonpersonal time deposits'
12/27/90
4
Eurocurrency liabilities 6 .. ,
12/27/90
1. Required reserves must be held in the form of deposits with Federal Reserve Banks
or vault cash. Nonmember institutions may maintain reserve balances with a Federal
Reserve Bank indirectly, on a pass-through basis, with certain approved institutions. For
previous reserve requirements, see earlier editions of the Annual Report or the Federal
Reserve Bulletin. Under the Monetary Control Act of 1980, depository institutions
include commercial banks, savings banks, savings and loan associations, credit unions,
agencies and branches of foreign banks, and Edge Act corporations.
2. Transaction accounts include all deposits against which the account holder is permitted
to make withdrawals by negotiable or transferable instruments, payment orders of withdrawal, or telephone or preauthorized transfers for the purpose of making payments to third
persons or others. However, accounts subject to the rules that permit no more than six
preauthorized, automatic, or other transfers per month (of which no more than three may be
by check, draft, debit card, or similar order payable directly to third parties) are savings
deposits, not transaction accounts.
3. The Monetary Control Act of 1980 requires that the amount of transaction accounts
against which the 3 percent reserve requirement applies be modified annually by 80 percent of
the percentage change in transaction accounts held by all depository institutions, determined
as of June 30 of each year. Effective with the reserve maintenance period beginning
December 30, 1999, for depository institutions that report weekly, and with the period
beginning January 20, 2000, for institutions that report quarterly, the amount was decreased
from $46.5 million to $44.3 million.
Under the Garn-St Germain Depository Institutions Act of 1982, the Board adjusts the
amount of reservable liabilities subject to a zero percent reserve requirement each year for the
succeeding calendar year by 80 percent of the percentage increase in the total reservable
liabilities of all depository institutions, measured on an annual basis as of June 30. No
corresponding adjustment is made in the event of a decrease. The exemption applies only to
accounts that would be subject to a 3 percent reserve requirement. Effective with the reserve
maintenance period beginning December 30, 1999, for depository institutions that report
weekly, and with the period beginning January 20, 2000, for institutions that report quarterly,
the exemption was raised from $4.9 million to $5.0 million.
4. The reserve requirement was reduced from 12 percent to 10 percent on
Apr. 2, 1992, for institutions that report weekly, and on Apr. 16, 1992, for institutions that
report quarterly.
5. For institutions that report weekly, the reserve requirement on nonpersonal time deposits
with an original maturity of less than 1 Vi years was reduced from 3 percent to 1 Vi percent for
the maintenance period that began Dec. 13, 1990, and to zero for the maintenance period that
began Dec. 27, 1990. For institutions that report quarterly, the reserve requirement on
nonpersonal time deposits with an original maturity of less than 1 x/i years was reduced from 3
percent to zero on Jan. 17, 1991.
The reserve requirement on nonpersonal time deposits with an original maturity of lVi
years or more has been zero since Oct. 6, 1983.
6. The reserve requirement on Eurocurrency liabilities was reduced from 3 percent to zero
in the same manner and on the same dates as the reserve requirement on nonpersonal time
deposits with an original maturity of less than 1 Vi years (see note 5).
Policy Instruments
1.17
A9
FEDERAL RESERVE OPEN MARKET TRANSACTIONS 1
Millions of dollars
2000
1999
Type of transaction
and maturity
1999
1998
1997
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
U.S. TREASURY SECURITIES2
1
?
4
5
6
7
8
9
10
11
1?
N
14
15
16
17
18
19
70
21
22
23
74
25
Outright transactions (excluding
transactions)
Treasury bills
Gross purchases
Gross sales
Exchanges
For new bills
Redemptions
Others within one year
Gross purchases
Gross sales
Maturity shifts
Exchanges
Redemptions
One to five years
Gross purchases
Gross sales
Maturity shifts
Exchanges
Five to ten years
Gross purchases
Gross sales
Maturity shifts
Exchanges
More than ten years
Gross purchases
Gross sales
Maturity shifts
Exchanges
All maturities
Gross purchases
Gross sales
Redemptions
Matched
matched
9,147
0
435,907
435,907
0
3,550
0
450,835
450,835
2,000
0
0
464,218
464,218
0
0
0
35,844
35,844
0
0
0
36,882
36,882
0
0
0
42,468
42,468
0
0
0
37,029
37,029
0
0
0
38,607
38,607
0
0
0
48,459
48,459
198
2,294
0
37,141
37,141
779
5,549
0
41,716
-27,499
1,996
6,297
0
46,062
-49,434
2,676
11,895
0
50,590
-53.315
1,429
0
0
3,831
-368
170
964
0
6,675
-10,150
0
1,450
0
3,936
-2,175
0
0
0
3,566
-4,360
390
0
0
6,877
-6,688
0
0
0
5,034
-3,515
0
0
0
0
0
568
20,080
0
-37,987
20,274
12,901
0
-37,777
37,154
19,731
0
-44,032
42,604
0
0
-3,831
0
1,014
0
-3,685
8,015
3,514
0
-3,936
2,175
160
0
-3,566
4,045
0
0
-5,210
4,348
740
0
-5,034
3,515
1,723
0
0
0
3,449
0
-1,954
5,215
2,294
0
-5,908
7,439
4,303
0
-5,841
7,583
0
0
0
0
0
0
-2,273
2,135
581
0
0
0
809
0
0
316
0
0
-949
1,170
489
0
0
0
930
0
0
0
5,897
0
-1,775
2,360
4,884
0
-2,377
4,842
9,428
0
—717
3,139
0
0
0
374
925
0
-717
0
1,257
0
0
0
1,069
0
0
0
0
0
-717
1,170
330
0
0
0
0
0
0
0
44,122
0
1,996
29,926
0
4,676
45,357
0
1,429
0
0
170
2,903
0
0
6,802
0
0
2,038
0
390
0
0
0
1,559
0
198
4,947
0
1,347
3,577,954
3,580,274
4,395,430
4,399,330
4,395,998
4,414,253
332,708
330,856
317,537
318,294
488,845
510,605
492,277
471,663
340,127
339,585
401,404
401,841
336,103
334,751
810,485
809,268
512,671
514,186
281,599
301,273
100
7,707
0
0
0
0
0
0
0
0
0
0
0
0
41,022
19,835
5,999
-5,924
2,146
-14,959
22,262
542
923
4,952
0
0
1,540
0
25
322
0
0
157
0
0
50
0
0
7
0
0
0
0
0
6
0
0
25
0
0
0
0
0
10
160,409
159,369
284,316
276,266
360,069
370,772
9,636
24,092
0
0
0
0
0
0
0
0
0
0
0
0
-500
7,703
-10,859
-14,506
-7
0
- 6
-25
0
-10
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
304,989
164,349
68,061
45,501
81,350
54,470
155,578
64,378
61,345
178,880
82,998
81,335
61,230
62,253
79,585
78,425
transactions
7 6 Gross purchases
2 7 Gross sales
Repurchase
agreements
2 8 Gross purchases
2 9 Gross sales
3 0 Net change in U.S. Treasury securities
FEDERAL AGENCY OBLIGATIONS
Outright
transactions
31 Gross purchases
37 Gross sales
3 3 Redemptions
Repurchase
agreements
3 4 Gross purchases
3 5 Gross sales
3 6 Net change in federal agency obligations
Reverse repurchase
agreements
37 Gross purchases
3 8 Gross sales
Repurchase
agreements
3 9 Gross purchases
4 0 Gross sales
4 1 Net change in triparty obligations
4 2 Total net change in System Open Market A c c o u n t . . .
0
0
140,640
22,560
26,880
91,200
-117,535
1,663
-1,023
1,160
40,522
27,538
135,780
2,130
29,019
76,241
-95,279
2,180
-100
6,102
1. Sales, redemptions, and negative figures reduce holdings of the System Open Market
Account; all other figures increase such holdings.
2. Transactions exclude changes in compensation for the effects of inflation on the principal
of inflation-indexed securities.
A10
1.18
DomesticNonfinancialStatistics • August 2000
FEDERAL RESERVE BANKS
Condition and Federal Reserve Note Statements 1
Millions of dollars
Account
May 3
May 10
Wednesday
End of month
2000
2000
May 17
May 2 4
May 3 1
Mar. 3 1
Apr. 3 0
May 3 1
Consolidated condition statement
ASSETS
1 Gold certificate account
2 Special drawing rights certificate account
3 Coin
11,048
5,200
553
11,048
5,200
572
11,048
5,200
588
11,048
5,200
574
11,048
5,200
599
11,048
6,200
483
11,048
5,200
569
11,048
5,200
599
258
0
0
280
0
0
431
0
0
484
0
0
431
0
0
236
0
0
240
0
0
431
0
0
32,515
14,175
14,620
12,530
26,395
23,745
24,905
26,395
140
0
140
0
140
0
140
0
140
0
150
0
140
0
140
0
Loans
4 To depository institutions
5 Other
6 Acceptances held under repurchase agreements
Triparty
Obligations
7 Repurchase agreements—triparty
2
Federal agency obligations'
8 Bought outright
9 Held under repurchase agreements
3
507,137
508,459
507,916
509,115
506,744
501,708
506,695
506,744
11 Bought outright
Bills
12
13
Notes
14
Bonds
15 Held under repurchase agreements
507,137
200,342
221,030
85,765
0
508,459
201,653
221,038
85,768
0
507,916
200,571
222,560
84,785
0
509,115
201,758
222,569
84,788
0
506,744
198,323
223,631
84,791
0
501,708
197,038
219,082
85,588
0
506,695
199,905
221,027
85,763
0
506,744
198,323
223,631
84,791
0
16 Total loans and securities
540,050
523,053
523,107
522,269
533,710
525,839
531,981
533,710
8,110
1,393
8,382
1,394
7,866
1,395
7,179
1,394
11,985
1,400
4,904
1,381
5,935
1,393
11,985
1,400
15,043
18,090
15,047
18,375
15,051
15,510
15,056
15,872
15,246
15,707
15,803
16,988
15,075
18,526
15,246
15,707
599,488
583,072
579,766
578,592
594,896
582,647
589,727
594,896
537,088
0
537,660
0
537,283
0
538,151
0
541,590
0
534,854
0
535,249
0
541,590
0
35,978
22,967
19,872
18,524
27,416
22,866
29,741
27,416
27,616
8,027
71
263
12,863
9,769
72
263
14,563
4,923
126
260
13,258
4,942
76
249
21,634
5,445
110
226
18,196
4,357
125
188
13,480
15,868
142
251
21,634
5,445
110
226
8,156
4,818
7,459
4,813
7,602
4,744
6,897
4,734
10,619
4,752
5,175
5,016
6,178
4,931
10,619
4,752
586,040
572,899
569,500
568,306
584,377
567,911
576,100
584,377
6,755
6,283
410
6,765
2,566
842
6,765
2,594
906
6,777
2,639
870
6,781
2,679
1,058
6,744
6,431
1,561
6,752
6,259
617
6,781
2,679
1,058
599,488
583,072
579,766
578,592
594,896
582,647
589,727
594,896
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
10 Total U.S. Treasury securities
4
17 Items in process of collection
18 Bank premises
Other assets
19 Denominated in foreign currencies
6
2 0 All other
5
2 1 Total assets
LIABILITIES
2 2 Federal Reserve notes
2
2 3 Reverse repurchase agreements—triparty
2 4 Total deposits
25
26
27
28
Depository institutions
U.S. Treasury—General account
Foreign—Official accounts
Other
2 9 Deferred credit items
7
3 0 Other liabilities and accrued dividends
3 1 Total liabilities
CAPITAL ACCOUNTS
3 2 Capital paid in
3 3 Surplus
3 4 Other capital accounts
3 5 Total liabilities and capital accounts
MEMO
3 6 Marketable U.S. Treasury securities held in custody for
foreign and international accounts
Federal Reserve note statement
3 7 Federal Reserve notes outstanding (issued to Banks)
38
LESS: Held by Federal Reserve Banks
Federal Reserve notes, net
39
40
41
42
43
Collateral held against notes, net
Gold certificate account
Special drawing rights certificate account
Other eligible assets
U.S. Treasury and agency securities
4 4 Total collateral
782,353
245,265
537,088
781,394
243,734
537,660
780,420
243,137
537,283
779,181
241,030
538,151
777,900
236,310
541,590
788,805
253,951
534,854
783,126
247,877
535,249
777,900
236,310
541,590
11,048
5,200
0
520,840
11,048
5,200
0
521,412
11,048
5,200
0
521,034
11,048
5,200
0
521,785
11,048
5,200
0
525,342
11,048
6,200
0
517,606
11,048
5,200
0
519,001
11,048
5,200
0
525,342
537,088
537,660
537,283
538,151
541,590
534,854
535,249
541,590
1. Some of the data in this table also appear in the Board's H.4.1 (503) weekly statistical
release. For ordering address, see inside front cover.
2. Cash value of agreements arranged through third-party custodial banks.
3. Face value of the securities.
4. Includes securities loaned—fully guaranteed by U.S. Treasury securities pledged with
Federal Reserve Banks—and includes compensation that adjusts for the effects of inflation on
the principal of inflation-indexed securities. Excludes securities sold and scheduled to be
bought back under matched sale-purchase transactions.
5. Valued monthly at market exchange rates.
6. Includes special investment account at the Federal Reserve Bank of Chicago in Treasury
bills maturing within ninety days.
7. Includes exchange-translation account reflecting the monthly revaluation at market
exchange rates of foreign exchange commitments.
Federal Reserve Banks
1.19
FEDERAL RESERVE BANKS
All
Maturity Distribution of Loan and Security Holding
Millions of dollars
Type of holding and maturity
Wednesday
End of month
2000
2000
May 3
May 10
May 17
May 24
May 31
Mar. 31
Apr. 30
May 31
1 Total loans
258
280
432
484
431
236
240
440
2 Within fifteen days'
3. Sixteen days to ninety days
4. 91 days to 1 year
92
166
0
96
184
0
404
27
0
454
31
0
311
120
0
203
33
0
178
63
0
402
38
0
507,137
508,459
507,916
509,115
506,744
501,708
506,693
506,744
17,346
107,052
137,874
124,338
52,391
68,137
19,237
105,999
138,345
124,340
52,397
68,140
17,492
105,363
138,892
125,253
53,422
67,494
20,887
108,146
133,902
125,254
53,428
67,497
15,491
105,584
139,209
125,525
53,435
67,500
3,674
114,085
141,215
123,170
51,438
68,127
6,882
117,248
137,144
124,898
52,387
68,135
15,491
105,584
139,209
125,525
53,435
67,500
12 Total federal agency obligations
140
140
140
140
140
150
140
140
13
14
15
16
17
18
0
0
10
10
120
0
0
0
10
10
120
0
0
0
10
10
120
0
0
0
10
10
120
0
0
0
10
10
120
0
10
0
10
10
120
0
0
0
10
10
120
0
0
0
10
10
120
0
5 Total U.S. Treasury securities 2
6
7
8
9
10
11
Within fifteen days'
Sixteen days to ninety days
Ninety-one days to one year
One year to five years
Five years to ten years
More than ten years
Within fifteen days'
Sixteen days to ninety days
Ninety-one days to one year
One year to five years
Five years to ten years
More than ten years
1. Holdings under repurchase agreements are classified as maturing within fifteen days in
accordance with maximum maturity of the agreements.
2. Includes compensation that adjusts for the effects of inflation on the principal of
inflation-indexed securities.
A12
D o m e s t i c Financial Statistics •
1.20
August 2000
AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE 1
Billions of dollars, averages of daily figures
1999r
Item
1996
Dec.
1997
Dec.
1998
Dec. r
Oct.
Total reserves3
Nonborrowed reserves 4
Nonborrowed reserves plus extended credit5
Required reserves
Monetary base 6
Nov.
Jan.r
Feb.r
Mar.r
Apr.
May
43.11
42.74
42.74
41.09
591.97
41.64
41.53
41.53
40.52
573.42
40.45
40.27
40.27
39.24
571.16
40.92
40.62
40.62
39.77
572.45
41.35
40.99
40.99
40.39
573.44
Dec.
Seasonally adjusted
ADJUSTED FOR
CHANGES IN RESERVE REQUIREMENTS2
1
2
3
4
5
2000
1999
Dec. r
50.17 r
50.02 r
50.02 r
48.76 r
451.62 r
46.87 r
46.54
46.54
45.18
479.17 r
45.19
45.07
45.07
43.68
512.75
41.74
41.42
41.42
40.43
591.19
41.34
41.06
41.06
40.19
557.85
41.56
41.33
41.33
40.23
569.43
41.74
41.42
41.42
40.43
591.19
Not seasonally adjusted
6
7
8
9
10
Total reserves7
Nonborrowed reserves
Nonbonrowed reserves plus extended credit5
Required reserves8
Monetary base 9
51.45
51.30
51.30
50.04
456.63
48.01
47.69
47.69
46.33
484.98
45.31
45.19
45.19
43.80
518.27
41.89
41.57
41.57
40.58
600.63
40.94
40.65
40.65
39.79
555.70
41.20
40.96
40.96
39.87
572.01
41.89
41.57
41.57
40.58
600.63
44.23
43.86
43.86
42.20
596.90
42.10
41.99
41.99
40.99
571.79
39.75
39.58
39.58
38.55
570.03
40.60
40.30
40.30
39.45
571.09
41.58
41.21
41.21
40.61
572.54
51.17
51.02
51.02
49.76
463.40
1.42
.16
47.92
47.60
47.60
46.24
491.79
1.69
.32
45.21
45.09
45.09
43.70
525.06
1.51
.12
41.66
41.33
41.33
40.35
607.93
1.31
.32
40.73
40.45
40.45
39.58
562.68
1.15
.28
40.97
40.74
40.74
39.64
578.98
1.33
.24
41.66
41.33
41.33
40.35
607.93
1.31
.32
44.23
43.86
43.86
42.21
604.63
2.03
.37
42.10
41.99
41.99
40.98
579.13
1.11
.11
39.74
39.56
39.56
38.53
576.92
1.21
.18
40.58
40.28
40.28
39.43
577.91
1.15
.30
41.56
41.19
41.19
40.59
579.38
.97
.36
NOT ADJUSTED FOR
CHANGES IN RESERVE REQUIREMENTS10
11
12
13
14
15
16
17
Total reserves 11
Nonborrowed reserves
Nonborrowed reserves plus extended credit5
Required reserves
Monetary base 12
Excess reserves 13
Borrowings from the Federal Reserve
1. Latest monthly and biweekly figures are available from the Board's H.3 (502) weekly
statistical release. Historical data starting in 1959 and estimates of the effect on required
reserves of changes in reserve requirements are available from the Money and Reserves
Projections Section, Division of Monetary Affairs, Board of Governors of the Federal Reserve
System, Washington, DC 20551.
2. Figures reflect adjustments for discontinuities, or "breaks," associated with regulatory
changes in reserve requirements. (See also table 1.10.)
3. Seasonally adjusted, break-adjusted total reserves equal seasonally adjusted, breakadjusted required reserves (line 4) plus excess reserves (line 16).
4. Seasonally adjusted, break-adjusted nonborrowed reserves equal seasonally adjusted,
break-adjusted total reserves (line 1) less total borrowings of depository institutions from the
Federal Reserve (line 17).
5. Extended credit consists of borrowing at the discount window under the terms and
conditions established for the extended credit program to help depository institutions deal
with sustained liquidity pressures. Because there is not the same need to repay such
borrowing promptly as with traditional short-term adjustment credit, the money market eifect
of extended credit is similar to that of nonborrowed reserves.
6. The seasonally adjusted, break-adjusted monetary base consists of (1) seasonally
adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally adjusted currency
component of the money stock, plus (3) (for all quarterly reporters on the "Report of
Transaction Accounts, Other Deposits and Vault Cash" and for all those weekly reporters
whose vault cash exceeds their required reserves) the seasonally adjusted, break-adjusted
difference between current vault cash and the amount applied to satisfy current reserve
requirements.
7. Break-adjusted total reserves equal break-adjusted required reserves (line 9) plus excess
reserves (line 16).
8. To adjust required reserves for discontinuities that are due to regulatory changes in
reserve requirements, a multiplicative procedure is used to estimate what required reserves
would have been in past periods had current reserve requirements been in effect. Breakadjusted required reserves include required reserves against transactions deposits and nonpersonal time and savings deposits (but not reservable nondeposit liabilities).
9. The break-adjusted monetary base equals (1) break-adjusted total reserves (line 6), plus
(2) the (unadjusted) currency component of the money stock, plus (3) (for all quarterly
reporters on the "Report of Transaction Accounts, Other Deposits and Vault Cash" and for all
those weekly reporters whose vault cash exceeds their required reserves) the break-adjusted
difference between current vault cash and the amount applied to satisfy current reserve
requirements.
10. Reflects actual reserve requirements, including those on nondeposit liabilities, with no
adjustments to eliminate the effects of discontinuities associated with regulatory changes in
reserve requirements.
11. Reserve balances with Federal Reserve Banks plus vault cash used to satisfy reserve
requirements.
12. The monetary base, not break-adjusted and not seasonally adjusted, consists of (1) total
reserves (line 11), plus (2) required clearing balances and adjustments to compensate for float
at Federal Reserve Banks, plus (3) the currency component of the money stock, plus (4) (for
all quarterly reporters on the "Report of Transaction Accounts, Other Deposits and Vault
Cash" and for all those weekly reporters whose vault cash exceeds their required reserves) the
difference between current vault cash and the amount applied to satisfy current reserve
requirements. Since February 1984, currency and vault cash figures have been measured over
the computation periods ending on Mondays.
13. Unadjusted total reserves (line 11) less unadjusted required reserves (line 14).
Monetary and Credit Aggregates
1.21
A13
MONEY STOCK A N D DEBT MEASURES 1
Billions of dollars, averages of daily figures
2000
Item
1996
Dec.
1997
Dec.
1998
Dec.
1999
Dec.r
Feb.r
Mar.r
Apr.
May
Seasonally adjusted
1
2
3
4
Measures2
Ml
M2
M3
Debt
5
6
7
8
MI components
Currency3
Travelers checks4
Demand deposits5
Other checkable deposits6
1,081.1
3,822.9
4,952.4
14,443.9r
1,073.9
4,041.9r
5,403.2r
15,234.7r
1,097.4
4,396.8 r
5,996.7r
16,282.9r
1,122.9
4,655.4
6,477.0
17,381.1
1,105.7
4,691.2
6,538.9
17,536.0
1,112.1
4,728.1
6,611.9
17,639.2
1,116.2
4,768.5
6,654.8
17,718.7
1,104.8
4,764.7
6,675.2
n.a.
394.3
8.3
402.3
276.1
424.8
8.1
395.3
245.8
459.5
8.2
379.3
250.3
515.5
8.3
355.2
244.0
518.4
8.1
338.1
241.2
517.3
8.2
343.0
243.7
518.2
8.2
341.9
248.0
519.6
8.3
334.4
242.5
2,741.8
1,129.5
2,967.9r
1,361.3
3,299.4r
1,599.9
3,532.5
1,821.5
3,585.5
1,847.7
3,615.9
1,883.9
3,652.3
1,886.3
3,659.8
1,910.5
Commercial banks
11 Savings deposits, including MMDAs
12 Small time deposits9
13 Large time deposits10, 11
904.0
593.3
413.9
1,020.5
625.4
488.3
1,184.8
626.1
539.3
1,285.7
634.7
614.4
1,302.0
644.4
620.5
1,309.1
650.1
627.6
1,325.2
659.7
644.7
1,322.2
667.0
649.6
Thrift institutions
14 Savings deposits, including MMDAs
15 Small time deposits9
16 Large time deposits10
366.6
353.6
78.3
376.6
342.8
85.6
413.8
325.6
88.9
448.7
320.5
91.5
449.6
323.7
95.0
452.3
324.7
95.1
449.3
324.2
94.6
453.3
326.4
93.4
Money market mutual funds
17 Retail
18 Institution-only
524.4
312.0
602.8r
380.8
749.2r
518.4
842.9
607.4
865.6
617.5
879.8
640.7
893.8
640.0
890.9
649.2
Repurchase agreements and Eurodollars
19 Repurchase agreements12
20 Eurodollars12
210.7
114.6
256.0
150.7
300.8
152.6
334.7
173.5
343.2
171.6
339.5
180.9
334.5
172.6
341.2
177.0
3,781.3
10,662.6r
3,800.3
11,434.4r
3,750.8
12,532.2r
3,659.5
13,721.7
3,609.4
13,926.6
3,618.8
14,020.4
3,602.3
14,116.4
n.a.
n.a.
Nontransaction
9 In M27
10 In M3 only8
components
Debt components
21 Federal debt
22 Nonfederal debt
Not seasonally adjusted
23
24
25
26
Measures2
Ml
M2
M3
Debt
27
28
29
30
Ml components
Currency3
Travelers checks4
Demand deposits5
Other checkable deposits6
1,105.1
3,845.2r
4,973.4
14,440.5r
1,097.7
4,065.0 r
5,427.2r
15,231.8r
1,121.3
4,422.0 r
6,026.3 r
16,279.8r
1,147.4
4,683.7
6,512.0
17,380.2
1,097.2
4,689.4
6,558.4
17,505.1
1,108.9
4,749.0
6,645.4
17,620.2
1,125.0
4,814.1
6,698.8
17,689.3
1,098.7
4,736.6
6,653.2
n.a.
397.9
8.6
419.9
278.8
428.9
8.3
412.4
248.2
464.1
8.4
395.9
252.8
521.2
8.4
371.2
246.7
517.5
8.3
331.7
239.8
517.4
8.3
338.5
244.6
518.6
8.3
344.4
253.6
519.2
8.4
329.2
241.9
2,740.0
1,128.2
2,967.4r
1,362.2
3,300.7r
1,604.3
3,536.3
1,828.3
3,592.1
1,869.0
3,640.1
1,896.4
3,689.1
1,884.8
3,637.8
1,916.7
Commercial banks
33 Savings deposits, including MMDAs
34 Small time deposits9
35 Large time deposits10, 11
903.3
592.7
413.2
1,020.4
625.3
487.2
1,186.0
626.5
537.8
1,288.5
635.5
612.6
1,294.6
647.0
616.0
1,311.8
652.1
627.8
1,341.5
660.4
644.5
1,317.4
664.6
654.3
Thrift institutions
36 Savings deposits, including MMDAs
37 Small time deposits9
38 Large time deposits10
366.3
353.2
78.1
376.5
342.8
85.4
414.2
325.8
88.6
449.7
321.0
91.2
447.1
325.0
94.3
453.2
325.7
95.1
454.9
324.5
94.5
451.7
325.3
94.1
Money market mutual funds
39 Retail
40 Institution-only
524.3
315.6
602.3r
386.7
748. r
527.9
841.6
618.9
878.5
640.6
897.3
650.5
907.8
640.2
878.8
644.5
Repurchase agreements and Eurodollars
41 Repurchase agreements12
42 Eurodollars12
205.7
115.7
250.5
152.3
295.4
154.5
330.0
175.6
345.1
173.0
342.2
180.8
333.1
172.5
345.3
178.5
3,754.9
12,524.9r
3,663.1
13,717.1
3,605.4
13,899.7
3,633.6
13,986.5
3,597.2
14,092.1
Nontransaction
31 In M27
32 In M3 only8
components
Debt components
43 Federal debt
44 Nonfederal debt
Footnotes appear on following page.
3,787.9
10,652.6r
3,805.8
1 l,426.0 r
n.a.
n.a.
A14
DomesticNonfinancialStatistics • August 2000
NOTES TO TABLE 1.21
1. Latest monthly and weekly figures are available from the Board's H.6 (508) weekly
statistical release. Historical data starting in 1959 are available from the Money and Reserves
Projections Section, Division of Monetary Affairs, Board of Governors of the Federal Reserve
System, Washington, DC 20551.
2. Composition of the money stock measures and debt is as follows:
Ml: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of
depository institutions, (2) travelers checks of nonbank issuers, (3) demand deposits at all
commercial banks other than those owed to depository institutions, the U.S. government, and
foreign banks and official institutions, less cash items in the process of collection and Federal
Reserve float, and (4) other checkable deposits (OCDs), consisting of negotiable order of
withdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions,
credit union share draft accounts, and demand deposits at thrift institutions. Seasonally
adjusted Ml is computed by summing currency, travelers checks, demand deposits, and
OCDs, each seasonally adjusted separately.
M2: Ml plus (1) savings deposits (including MMDAs), (2) small-denomination time
deposits (time deposits—including retail RPs—in amounts of less than $100,000), and (3)
balances in retail money market mutual funds. Excludes individual retirement accounts
(IRAs) and Keogh balances at depository institutions and money market funds. Seasonally
adjusted M2 is calculated by summing savings deposits, small-denomination time deposits,
and retail money fund balances, each seasonally adjusted separately, and adding this result to
seasonally adjusted Ml.
M3: M2 plus (1) large-denomination time deposits (in amounts of $100,000 or more)
issued by all depository institutions, (2) balances in institutional money funds, (3) RP
liabilities (overnight and term) issued by all depository institutions, and (4) Eurodollars
(overnight and term) held by U.S. residents at foreign branches of U.S. banks worldwide and
at all banking offices in the United Kingdom and Canada. Excludes amounts held by
depository institutions, the U.S. government, money market funds, and foreign banks and
official institutions. Seasonally adjusted M3 is calculated by summing large time deposits,
institutional money fund balances, RP liabilities, and Eurodollars, each seasonally adjusted
separately, and adding this result to seasonally adjusted M2.
Debt: The debt aggregate is the outstanding credit market debt of the domestic nonfinancial
sectors—the federal sector (U.S. government, not including government-sponsored enter-
prises or federally related mortgage pools) and the nonfederal sectors (state and local
governments, households and nonprofit organizations, nonfinancial corporate and nonfarm
noncorporate businesses, and farms). Nonfederal debt consists of mortgages, tax-exempt and
corporate bonds, consumer credit, bank loans, commercial paper, and other loans. The data,
which are derived from the Federal Reserve Board's flow of funds accounts, are breakadjusted (that is, discontinuities in the data have been smoothed into the series) and
month-averaged (that is, the data have been derived by averaging adjacent month-end levels).
3. Currency outside the U.S. Treasury, Federal Reserve Banks, and vaults of depository
institutions.
4. Outstanding amount of U.S. dollar-denominated travelers checks of nonbank issuers.
Travelers checks issued by depository institutions are included in demand deposits.
5. Demand deposits at commercial banks and foreign-related institutions other than those
owed to depository institutions, the U.S. government, and foreign banks and official institutions, less cash items in the process of collection and Federal Reserve float.
6. Consists of NOW and ATS account balances at all depository institutions, credit union
share draft account balances, and demand deposits at thrift institutions.
7. Sum of (1) savings deposits (including MMDAs), (2) small time deposits, and (3) retail
money fund balances.
8. Sum of (1) large time deposits, (2) institutional money fund balances, (3) RP liabilities
(overnight and term) issued by depository institutions, and (4) Eurodollars (overnight and
term) of U.S. addressees.
9. Small time deposits—including retail RPs—are those issued in amounts of less than
$100,000. All IRAs and Keogh accounts at commercial banks and thrift institutions are
subtracted from small time deposits.
10. Large time deposits are those issued in amounts of $100,000 or more, excluding those
booked at international banking facilities.
11. Large time deposits at commercial banks less those held by money market funds,
depository institutions, the U.S. government, and foreign banks and official institutions.
12. Includes both overnight and term.
Commercial Banking Institutions—Assets and Liabilities
1.26
COMMERCIAL BANKS IN THE UNITED STATES
A15
Assets and Liabilities1
A. All commercial banks
Billions of dollars
Wednesday figures
Monthly averages
Account
1999r
1999
May r
Nov.
2000
2000
Dec.
Jan.r
Feb.r
Mar/
Apr.'
May
May 10
May 17
May 24
May 31
Seasonally adjusted
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Assets
Bank credit
Securities in bank credit
U.S. government securities
Other securities
Loans and leases in bank credit2 . . .
Commercial and industrial
Real estate
Revolving home equity
Other
Consumer
Security3
Other loans and leases
Interbank loans
Cash assets 4
Other assets5
16 Total assets 6
17
18
19
20
21
22
23
24
25
26
Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From others
Net due to related foreign offices
Other liabilities
27 Total liabilities
28 Residual (assets less liabilities)
7
4,516.2
1,191.2
801.8
389.4
3,325.0
957.6
1,361.3
105.6
1,255.6
493.3
128.1
384.8
224.9
260.6
343.8
4,687.9
1,243.0
799.0
444.1
3,444.9
998.0
1,432.6
100.7
1,331.8
483.5
133.6
397.2
224.9
274.6
368.8
4,763.5
1,263.5
803.9
459.6
3,500.0
1,003.3
1,469.1
102.0
1,367.1
491.0
153.1
383.4
229.4
287.6
379.1
4,786.5
1,266.2
811.4
454.7
3,520.3
1,012.5
1,486.4
104.3
1,382.1
497.0
143.1
381.3
225.1
286.2
405.5
4,820.1
1,267.6
813.6
453.9
3,552.6
1,021.4
1,504.1
106.5
1,397.6
501.7
142.3
383.0
235.8
284.1
412.6
4,858.1
1,275.6
811.9
463.7
3,582.4
1,030.5
1,521.1
109.1
1,411.9
504.8
142.5
383.6
237.1
277.5
400.3
4,904.4
1,283.9
809.8
474.1
3,620.5
1,039.3
1,541.4
112.9
1,428.5
508.7
143.3
387.8
238.1
287.4
401.7
4,970.1
1,301.9
811.1
490.8
3,668.2
1,059.9
1,562.9
115.7
1,447.2
513.0
144.5
387.9
242.5
279.8
411.7
4,956.7
1,300.7
808.2
492.4
3,656.0
1,057.4
1,555.2
115.0
1,440.2
510.3
143.9
389.2
243.2
277.7
408.9
4,963.4
1,299.9
810.9
489.0
3,663.6
1,062.5
1,561.1
115.5
1,445.6
513.0
139.7
387.2
252.1
278.2
410.2
4,983.7
1,307.1
815.9
491.2
3,676.6
1,061.4
1,567.5
116.1
1,451.4
513.4
144.3
390.0
235.4
267.4
417.4
4,989.6
1,302.3
811.8
490.5
3,687.3
1,062.4
1,572.8
116.6
1,456.2
515.9
151.9
384.3
239.8
288.2
415.4
5,286.6
5,497.0
5,599.8
5,644.2
5,693.8
5,713.9
5,772.1
5,844.2
5,826.5
5,843.8
5,843.8
5,873.1
3,381.4
649.9
2,731.6
729.6
2,002.0
1,002.2
321.5
680.8
202.9
268.4
3,481.8
624.9
2,856.9
801.8
2,055.1
1,059.8
349.9
709.9
223.9
297.7
3,524.5
630.2
2,894.4
828.2
2,066.2
1,116.6
347.1
769.5
221.1
302.3
3,541.1
626.4
2,914.6
841.0
2,073.7
1,134.0
360.0
774.0
229.8
290.3
3,558.8
624.6
2,934.3
847.7
2,086.6
1,130.5
365.1
765.4
233.9
295.5
3,575.8
625.5
2,950.2
854.3
2,095.9
1,151.3
373.2
778.2
233.1
289.5
3,626.9
625.4
3,001.5
875.8
2,125.7
1,185.4
374.3
811.2
223.8
289.4
3,632.4
628.7
3,003.7
881.8
2,121.9
1,197.4
380.1
817.2
249.4
312.3
3,627.0
615.9
3,011.1
886.8
2,124.3
1,207.4
379.4
828.0
222.9
313.2
3,626.6
623.0
3,003.6
878.0
2,125.6
1,198.5
389.0
809.5
249.7
316.3
3,623.0
633.9
2,989.0
879.6
2,109.4
1,191.3
372.2
819.1
250.4
312.3
3,654.1
651.7
3,002.5
880.5
2,121.9
1,191.6
379.7
811.9
276.8
310.8
4,855.0
5,063.1
5,164.6
5,195.2
5,218.7
5,249.7
5,325.5
5,391.6
5,370.5
5391.2
5377.0
5,4333
452.6
456.0
452.7
466.9
439.8
431.6
433.8
435.2
449.0
475.0
464.2
446.6
Not seasonally adjusted
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
Assets
Bank credit
Securities in bank credit
U.S. government securities
Other securities
Loans and leases in bank credit2 . . .
Commercial and industrial
Real estate
Revolving home equity
Other
Consumer
Security 3
Other loans and leases
Interbank loans
Cash assets 4
Other assets 5
44 Total assets 6
45
46
47
48
49
50
51
52
53
54
Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From others
Net due to related foreign offices
Other liabilities
....
55 Total liabilities
56 Residual (assets less liabilities) 7
MEMO
57 Revaluation gains on off-balance-sheet
items 8
58 Revaluation losses on off-balancesheet items 8
Footnotes appear on p. A21.
4,511.6
1,192.3
807.7
384.6
3,319.3
960.4
1,359.6
105.3
1,254.3
492.8
126.0
380.5
223.9
258.4
346.8
4,715.4
1,256.9
801.8
455.1
3,458.5
1,001.8
1,439.0
101.1
1,337.9
482.2
135.8
399.8
229.0
283.6
365.7
4,795.8
1,273.6
806.0
467.7
3,522.2
1,005.3
1,473.9
102.4
1,371.6
496.5
157.8
388.7
234.9
307.5
379.1
4,810.7
1,274.7
813.2
461.5
3,536.0
1,010.0
1,490.4
104.6
1,385.8
504.2
147.2
384.2
225.9
300.4
404.1
4,823.1
1,271.7
817.6
454.1
3,551.4
1,022.1
1,501.1
106.2
1,394.8
503.8
143.8
380.7
237.3
284.7
415.1
4,852.2
1,277.1
818.9
458.2
3,575.2
1,034.4
1,516.3
108.1
1,408.2
503.2
141.5
379.8
243.0
269.0
404.0
4,905.0
1,285.7
818.4
467.3
3,619.2
1,046.3
1,537.0
112.0
1,425.0
507.6
143.9
384.4
245.0
284.4
405.7
4,962.2
1,299.5
816.4
483.1
3,662.7
1,062.8
1,560.3
115.3
1,445.1
512.6
143.0
384.0
242.4
277.6
415.5
4,951.7
1,300.4
814.7
485.7
3,651.4
1,061.4
1,554.2
114.5
1,439.7
509.8
142.2
383.8
241.2
265.5
415.1
4,955.9
1,297.0
816.2
480.9
3,658.9
1,066.0
1,558.8
115.1
1,443.8
512.9
138.4
382.8
251.8
267.1
411.2
4,963.7
1,300.9
818.8
482.1
3,662.8
1,061.1
1,563.6
115.7
1,448.0
513.1
141.6
383.4
230.6
255.1
414.2
4,984.6
1,300.8
817.1
483.7
3,683.8
1,063.8
1,569.9
116.2
1,453.6
515.2
150.2
384.7
244.5
314.3
424.4
5,281.9
5,534.1
5,657.4
5,6823
5,701.4
5,709.1
5,780.8
5,837.7
5,813.7
5,826.0
5,803.7
5,907.7
3,368.2
640.2
2,728.0
727.3
2,000.6
1,010.4
322.0
688.3
202.1
267.4
3,509.6
633.1
2,876.5
811.9
2,064.6
1,067.7
353.3
714.4
227.9
298.7
3,566.9
662.9
2,903.9
843.2
2,060.8
1,125.8
352.0
773.8
227.4
304.5
3,554.4
637.9
2,916.5
852.0
2,064.5
1,152.5
363.9
788.7
233.4
291.7
3,557.7
617.6
2,940.2
860.4
2,079.8
1,134.4
366.7
767.7
248.3
297.8
3,579.7
618.4
2,961.2
862.8
2,098.4
1,146.3
373.0
773.3
236.7
290.1
3,644.9
634.0
3,010.8
875.3
2,135.5
1,183.6
375.5
808.1
213.1
288.2
3,617.8
619.4
2,998.4
878.1
2,120.3
1,206.9
380.9
826.0
249.8
310.9
3,608.6
597.1
3,011.5
884.4
2,127.1
1,219.0
380.3
838.7
221.7
312.3
3,605.4
609.9
2,995.5
873.0
2,122.5
1,208.6
389.2
819.4
246.7
314.7
3,581.7
605.0
2,976.8
875.6
2,101.1
1,196.6
371.4
825.2
259.5
310.3
3,667.9
669.2
2,998.8
875.5
2,123.3
1,198.9
380.3
818.6
278.3
309.5
4,848.0
5,103.9
5,224.6
5,232.0
5,238.2
5,252.8
5,329.8
5,385.4
5,361.7
5375.4
5,348.2
5/454.6
433.9
430.3
432.8
450.3
463.1
456.3
450.9
452.3
452.0
450.6
455.4
453.1
84.3
100.8
104.1
102.4
104.9
105.3
104.7
117.5
119.1
121.0
117.5
111.5
85.8
99.7
102.4
100.9
104.4
102.3
103.5
117.3
118.3
121.4
117.7
111.4
A16
1.26
Domestic Financial Statistics • August 2000
COMMERCIAL BANKS IN THE UNITED STATES
Assets and Liabilities 1 —Continued
B. Domestically chartered commercial banks
Billions of dollars
Monthly averages
Account
1999r
1999
r
May
Nov.
Wednesday figures
2000
Dec.
r
Jan.
r
Feb.
1
Mar. "
2000
Apr/
May
May 10
May 17
May 24
May 31
Seasonally adjusted
Assets
1 Bank credit
2
Securities in bank credit
U.S. government securities
3
4
Other securities
Loans and leases in bank credit2
5
6
Commercial and industrial
7
Real estate
8
Revolving home equity
y
Other
10
Consumer
11
Security3
Other loans and leases
12
Interbank
loans
13
14 Cash assets4
15 Other assets5
3,978.6
997.5
715.2
282.3
2,981.1
755.5
1,341.7
105.6
1,236.1
493.3
75.5
315.2
198.4
223.1
308.4
4,149.4
1,050.7
720.5
330.2
3,098.7
801.7
1,415.2
100.7
1,314.5
483.5
68.3
329.9
199.7
225.8
333.9
4,215.2
1,061.2
723.2
338.0
3,154.0
809.9
1,452.1
102.0
1,350.2
491.0
86.1
314.9
199.9
234.1
342.5
4,239.3
1,065.8
730.9
334.9
3,173.5
817.6
1,469.0
104.3
1,364.7
497.0
76.5
313.5
196.2
230.7
367.0
4,280.2
1,076.4
738.3
338.0
3,203.9
824.7
1,486.4
106.5
1,379.8
501.7
75.7
315.3
203.2
229.6
374.5
4.314.7
1,081.4
734.5
346.9
3.233.2
832.3
1,503.0
109.1
1.393.8
504.8
76.2
317.0
208.8
225.7
361.3
4,337.0
1,083.3
731.0
352.3
3,253.7
837.5
1,523.0
112.9
1,410.1
508.7
65.7
318.8
208.9
235.5
362.0
4,389.1
1,095.2
732.2
362.9
3,293.9
852.3
1,544.2
115.7
1,428.5
513.0
63.9
320.5
210.9
231.8
370.9
4,374.7
1,094.4
730.9
363.5
3,280.3
850.5
1,536.8
115.0
1,421.8
510.3
63.0
319.7
208.6
229.8
367.9
4,387.3
1,095.5
733.6
361.9
3,291.8
855.1
1,542.4
115.5
1,426.9
513.0
61.9
319.4
216.5
229.5
371.4
4,400.9
1,097.4
733.9
363.5
3,303.5
852.4
1,548.6
116.1
1,432.5
513.4
65.3
323.8
207.6
219.5
374.3
4,405.9
1,096.2
732.3
363.8
3,309.8
854.3
1,553.9
116.6
1,437.3
515.9
66.1
319.6
212.3
241.2
374.6
16 Total assets6
4,649.9
4,849.9
4,932.2
4,974.5
5,028.9
5,051.6
5,084.2
5,143.0
5,121.4
5,144.9
5,142.5
5,174.5
3,066.7
639.1
2,427.6
427.9
1,999.7
826.3
299.6
526.8
123.3
209.0
3,126.5
614.5
2,511.9
459.5
2,052.4
873.8
323.8
550.1
178.9
230.5
3,150.4
619.6
2,530.7
467.8
2,063.0
935.1
322.6
612.5
182.0
232.9
3,160.2
615.6
2,544.6
473.6
2,071.0
954.1
340.3
613.8
194.2
220.3
3,178.2
613.5
2,564.7
480.1
2,084.6
954.3
346.8
607.5
207.1
224.0
3.192.7
614.2
2,578.5
485.4
2,093.1
973.2
353.6
619.6
213.2
220.2
3,233.3
614.3
2,619.0
496.2
2,122.7
984.5
353.6
630.9
208.9
218.7
3,244.0
617.3
2,626.8
507.5
2,119.3
991.5
362.5
629.0
229.3
235.1
3,227.8
604.5
2,623.4
502.3
2,121.1
1,000.9
360.5
640.5
208.5
236.1
3,240.3
612.0
2,628.3
505.9
2,122.4
998.1
372.7
625.4
226.7
236.5
3,239.1
622.2
2,616.9
509.7
2,107.1
984.2
357.6
626.6
233.5
232.3
3,276.2
639.7
2,636.4
516.1
2,120.3
980.7
359.2
621.5
246.9
238.7
4,225.4
4,409.7
4,500.4
4,528.8
4,563.6
4,599.3
4,645.4
4,699.9
4,673.4
4,701.6
4,689.2
4,742.4
424.5
440.1
431.8
445.7
465.3
452.3
438.8
443.1
448.0
443.4
453.3
432.1
17
18
19
20
21
22
23
24
25
26
Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From others
Net due to related foreign offices . . . .
Other liabilities
27 Total liabilities
28 Residual (assets less liabilities)7
Not seasonally adjusted
Assets
29 Bank credit
30
Securities in bank credit
31
U.S. government securities
32
Other securities
Loans and leases in bank credit2
33
34
Commercial and industrial
Real estate
35
36
Revolving home equity
37
Other
38
Consumer
39
Security3
Other loans and leases
40
41 Interbank loans
42 Cash assets4
43 Other assets5
44 Total assets6
45
46
47
48
49
50
51
52
53
54
Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From others
Net due to related foreign offices . . . .
Other liabilities
55 Total liabilities
56 Residual (assets less liabilities)7
3,980.7
1,000.3
720.0
280.3
2,980.5
762.2
1,340.1
105.3
4,164.3
1,055.1
721.8
333.3
3,109.2
802.6
1,421.6
101.1
4,237.5
1,067.6
723.9
343.7
3,170.0
808.3
1,457.0
102.4
4,255.8
1,070.4
732.1
338.3
3,185.4
813.6
1,472.8
104.6
4,279.0
1,079.2
742.2
337.0
3,199.8
822.9
1,483.0
106.2
4,310.2
1,085.8
741.7
344.1
3,224.4
834.6
1,498.0
108.1
4,343.8
1,088.7
738.9
349.9
3,255.1
846.3
1,518.7
112.0
4,389.5
1,095.8
736.5
359.2
3,293.8
859.4
1,541.7
115.3
4,377.4
1,096.1
736.0
360.2
3,281.2
858.6
1,535.8
114.5
4,389.2
1,096.6
738.4
358.2
3,292.5
862.6
1,540.2
115.1
4,392.2
1,095.3
736.4
359.0
3,296.9
857.5
1,544.8
115.7
4,407.1
1,096.8
736.7
360.1
3,310.3
859.8
1,551.0
116.2
1,234.8
1,320.5
1,354.6
1,368.2
1,376.8
1,390.0
1,406.6
1,426.4
1,421.3
1,425.1
1,429.2
1,434.7
492.8
73.6
311.8
197.4
221.8
311.8
482.2
71.0
331.8
203.8
231.8
330.8
496.5
90.3
317.9
205.4
249.7
340.3
504.2
80.1
314.6
197.0
242.6
364.1
503.8
77.4
312.6
204.7
230.8
375.1
503.2
74.9
313.7
214.7
218.3
363.7
507.6
66.2
316.3
215.7
234.8
366.7
512.6
62.5
317.6
210.7
230.8
375.3
509.8
61.5
315.5
206.6
219.3
373.9
512.9
61.0
315.9
216.2
219.8
372.7
513.1
62.9
318.6
202.8
208.9
372.3
515.2
64.3
320.0
217.0
267.4
384.7
4,653.3
4,871.5
4,973.3
5,001.0
5,031.1
5,048.0
5,102.1
5,146.7
5,117.7
5,138.2
5,116.5
5,216.5
3,052.4
629.8
2,422.6
424.2
1,998.4
834.5
300.2
534.3
126.7
209.0
3,151.6
622.6
2,529.0
466.7
2,062.3
881.7
327.2
554.5
181.2
230.5
3,184.2
651.8
2,532.4
474.0
2,058.4
944.3
327.6
616.7
183.0
233.1
3,166.7
626.9
2,539.7
479.2
2,060.5
972.6
344.2
628.4
195.5
220.0
3,170.1
606.6
2,563.5
486.7
2,076.7
958.2
348.3
609.9
219.1
224.4
3,190.4
607.4
2,583.0
487.1
2,096.0
968.2
353.5
614.7
216.2
220.6
3,250.2
623.3
2,626.9
493.8
2,133.1
982.7
354.9
627.8
202.9
219.3
3,228.6
608.4
2,620.2
502.2
2,117.9
1,001.0
363.2
637.8
234.0
235.1
3,208.5
586.3
2,622.2
497.5
2,124.7
1,012.6
361.4
651.1
212.2
236.4
3,219.7
599.4
2,620.3
500.2
2,120.1
1,008.1
372.8
635.3
227.5
236.4
3,196.5
593.9
2,602.6
503.9
2,098.7
989.6
356.8
632.8
247.2
232.2
3,288.9
657.4
2,631.5
510.6
2,120.9
988.0
359.8
628.2
252.0
238.5
4,222.7
4,445.0
4,544.6
4,554.7
4,571.8
4,595.4
4,655.1
4,698.6
4,669.7
4,691.7
4,665.4
4,767.4
430.6
426.5
428.7
446.3
459.3
452.6
447.1
448.1
448.0
446.5
451.1
449.0
50.1
59.8
64.5
62.7
64.8
66.0
65.4
72.7
73.8
74.2
72.5
69.8
52.0
59.8
63.9
61.9
64.4
64.1
65.1
73.0
73.7
335.5
348.2
347.8
348.5
353.1
354.3
358.9
357.4
357.8
74.5
357.2
73.1
356.3
70.5
358.2
MEMO
57 Revaluation gains on off-balance-sheet
items8
58 Revaluation losses on off-balancesheet items8
9
5 9 Mortgage-backed securities
Footnotes appear on p. A21.
Commercial Banking Institutions—Assets and Liabilities
1.26
COMMERCIAL BANKS IN THE UNITED STATES
A17
Assets and Liabilities 1 —Continued
C. Large domestically chartered commercial banks
Billions of dollars
Wednesday figures
Monthly averages
Account
1999r
1999
Mayr
Nov.
2000
2000
Dec.
Jan.r
Feb.r
Mar.r
Apr.r
May
May 10
May 17
May 24
May 31
Seasonally adjusted
Assets
1 Bank credit
2
Securities in bank credit
3
U.S. government securities
4
Trading account
5
Investment account
6
Other securities
7
Trading account
8
Investment account
9
State and local government .
10
Other
11
Loans and leases in bank credit2 . . .
12
Commercial and industrial
13
Bankers acceptances
14
Other
15
Real estate
16
Revolving home equity
17
Other
18
Consumer
19
Security3
20
Federal funds sold to and
repurchase agreements
with broker-dealers
21
Other
22
State and local government
23
Agricultural
24
Federal funds sold to and
repurchase agreements
with others
25
All other loans
26
Lease-financing receivables
27 Interbank loans
28
Federal funds sold to and
repurchase agreements with
commercial banks
29
Other
30 Cash assets4
31 Other assets5
32 Total assets 6
33
34
35
36
37
38
39
40
41
42
Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From others
Net due to related foreign offices
Other liabilities
43 Total liabilities
44 Residual (assets less liabilities)7
Footnotes appear on p. A21.
2,491.1
560.0
391.4
22.1
369.4
168.6
67.8
100.8
25.1
75.7
1,931.0
562.2
1.0
561.2
745.5
76.4
669.1
303.4
70.9
2,583.4
602.9
391.2
18.8
372.4
211.7
82.4
129.3
26.5
102.8
1,980.4
591.1
1.1
589.9
775.8
69.9
705.9
289.2
62.8
2,637.5
614.6
396.4
20.1
376.3
218.2
87.1
131.1
26.6
104.6
2,022.9
597.6
1.1
596.5
806.4
70.7
735.8
292.6
80.8
2,637.1
613.4
397.4
21.0
376.4
216.0
81.8
134.1
26.9
107.3
2,023.7
600.6
1.1
599.5
813.3
72.1
741.2
294.1
71.4
2,659.3
619.7
400.4
22.1
378.2
219.4
86.2
133.1
27.0
106.1
2,039.6
604.8
1.0
603.8
820.4
73.7
746.7
298.1
70.5
2,680.5
626.6
398.9
21.0
377.9
227.7
91.5
136.2
27.2
109.0
2,053.9
608.4
1.0
607.4
828.3
75.6
752.7
300.0
70.8
2,696.2
629.7
397.4
21.9
375.5
232.4
93.3
139.0
27.7
111.3
2,066.5
611.7
1.1
610.6
842.9
78.9
764.0
3(M.O
60.0
2,734.3
640.1
399.1
24.1
375.0
241.0
101.7
139.3
28.0
111.4
2,094.2
623.8
1.1
622.7
855.3
81.1
774.2
306.0
58.6
2,728.4
640.8
398.3
22.6
375.7
242.5
104.0
138.4
27.8
110.6
2,087.6
623.1
1.1
621.9
851.7
80.7
771.0
305.0
57.7
2,731.2
640.0
399.6
25.3
374.3
240.3
101.6
138.8
28.0
110.8
2,091.3
626.6
1.1
625.5
853.4
81.0
772.4
306.0
56.5
2,742.3
640.7
399.8
24.6
375.2
240.8
100.4
140.4
28.0
112.4
2,101.6
623.5
1.1
622.3
858.3
81.4
776.8
305.7
60.2
2,743.4
640.7
400.0
24.5
375.5
240.7
100.7
140.0
28.0
112.0
2,102.6
624.7
1.1
623.6
860.7
81.8
778.9
307.2
60.8
53.9
17.0
11.9
9.3
44.5
18.4
12.5
10.2
60.9
19.9
12.6
10.3
50.3
21.1
12.7
10.5
47.2
23.3
12.8
10.7
48.9
22.0
13.0
10.7
38.3
21.7
13.1
10.8
39.3
19.3
13.0
10.8
37.3
20.4
13.0
10.8
37.6
18.9
13.0
10.8
40.2
20.1
13.0
10.8
43.3
17.6
13.0
10.8
11.3
96.9
119.6
146.4
12.5
96.3
130.0
147.0
12.0
79.3
131.3
147.4
11.4
78.3
131.3
143.9
11.5
79.4
131.3
149.4
11.5
79.7
131.3
155.4
11.8
79.6
132.7
148.6
11.9
80.9
133.8
154.2
11.8
80.8
133.6
151.8
11.7
79.4
133.8
158.6
12.1
84.2
133.8
152.2
12.1
79.1
134.2
156.1
91.6
54.8
155.4
236.0
77.5
69.5
155.8
253.0
75.1
72.2
160.8
260.3
69.1
74.8
160.9
281.9
76.4
73.0
160.9
291.1
80.2
75.2
157.1
278.1
77.1
71.5
166.7
277.2
83.5
70.7
160.3
282.4
80.8
71.0
159.0
280.0
85.9
72.7
158.1
281.1
83.6
68.6
150.0
284.4
85.7
70.4
166.8
287.1
2,989.5
3,099.9
3,166.5
3,185.0
3,2223
3,232.8
3,250.2
3,292.6
3,280.5
3,2903
3,290.1
3,314.9
1,745.4
366.5
1,378.9
233.7
1,145.2
645.0
216.1
428.9
118.3
178.9
1,745.5
341.7
1,403.8
254.1
1,149.7
674.1
238.1
436.0
174.4
197.4
1,757.9
348.4
1,409.5
260.3
1,149.2
729.8
238.3
491.5
177.5
199.4
1,751.9
339.7
1,412.3
263.0
1,149.2
734.3
251.3
483.0
189.1
185.8
1,758.8
336.4
1,422.4
265.6
1,156.8
732.5
257.1
475.4
201.9
187.7
1,764.3
335.9
1,428.5
267.6
1,160.9
744.3
260.4
483.9
207.8
185.7
1,790.5
335.3
1,455.1
276.3
1,178.8
753.4
264.2
489.1
203.5
185.0
1,794.4
337.9
1,456.4
284.8
1,171.6
754.2
269.7
484.4
223.3
199.8
1,785.7
329.1
1,456.6
281.4
1,175.2
767.5
270.4
497.1
202.3
201.1
1,790.1
335.0
1,455.1
282.9
1,172.2
760.8
278.4
482.5
220.6
201.1
1,790.5
341.3
1,449.2
286.2
1,163.0
745.4
264.4
480.9
227.5
196.3
1,815.7
353.4
1,462.3
291.4
1,170.9
738.7
264.7
474.0
241.3
203.5
2,687.5
2,791.4
2,864.6
2,861.1
2,880.9
2,902.2
2,932.4
2,971.7
2,956.6
2,972.7
2,959.7
2,999.2
301.9
308.5
301.9
323.9
341.4
330.6
317.8
320.9
323.9
317.6
330.4
315.7
A18
1.26
Domestic Financial Statistics • August 2000
COMMERCIAL BANKS IN THE UNITED STATES
Assets and Liabilities 1 —Continued
C. Large domestically chartered commercial banks—Continued
Monthly averages
Account
1999r
1999
May r
Nov.
Wednesday figures
2000
Dec.
Jan.r
Feb/
Mar.r
2000
Apr.r
May
May 10
May 17
May 24
May 31
Not seasonally adjusted
Assets
45 Bank credit
46
Securities in bank credit
47
U.S. government securities
48
Trading account
49
Investment account
50
Mortgage-backed securities . .
51
Other
52
One year or less
53
One to five years
54
More than five years . . .
55
Other securities
56
Trading account
57
Investment account
58
State and local government . .
59
Other
60
Loans and leases in bank credit2 . .
61
Commercial and industrial
62
Bankers acceptances
63
Other
64
Real estate
65
Revolving home equity
66
Other
67
Commercial
68
Consumer
69
Security 3
70
Federal funds sold to and
repurchase agreements
with broker-dealers . . . .
71
Other
72
State and local government . . . .
73
Agricultural
74
Federal funds sold to and
repurchase agreements
with others
75
All other loans
76
Lease-financing receivables . . . .
77 Interbank loans
78
Federal funds sold to and
repurchase agreements
with commercial banks
79
Other
80 Cash assets 4
81 Other assets 5
82 Total assets 6
83
84
85
86
87
88
89
90
91
92
Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From nonbanks in the U.S
Net due to related foreign offices . . .
Other liabilities
93 Total liabilities
94 Residual (assets less liabilities) 7
....
2,485.9
558.7
392.8
20.8
372.0
248.2
123.8
24.9
57.4
41.5
165.9
67.8
98.1
25.0
73.1
1,927.2
566.4
1.0
565.4
743.2
76.1
404.3
262.9
302.9
68.9
2,598.6
609.0
394.3
19.9
374.3
247.9
126.4
24.2
61.4
40.9
214.8
82.4
132.3
26.8
105.6
1,989.6
593.0
1.1
591.8
780.2
70.0
428.9
281.3
287.4
65.6
2,659.4
621.5
397.7
20.0
377.7
247.7
130.0
25.5
62.3
42.2
223.8
87.1
136.7
26.8
109.9
2,037.9
596.4
1.1
595.3
811.9
70.8
455.2
285.8
295.7
85.0
2,659.9
619.7
400.1
21.7
378.4
247.5
130.9
26.4
62.0
42.5
219.6
81.8
137.7
27.1
110.6
2,040.2
597.5
1.1
596.5
819.5
72.4
457.4
289.6
300.7
75.1
2,670.8
625.8
406.7
23.2
383.5
253.4
130.2
30.7
58.9
40.6
219.1
86.2
132.9
27.2
105.7
2,044.9
604.1
1.0
603.1
821.7
73.6
457.4
290.8
301.1
72.2
2,682.2
630.0
404.8
22.0
382.8
253.2
129.7
32.6
56.9
40.1
225.1
91.5
133.7
27.3
106.4
2,052.2
610.7
1.0
609.6
826.6
74.8
460.0
291.8
300.3
69.5
2,699.7
630.7
402.0
22.1
379.9
251.6
128.3
32.4
55.7
40.2
228.7
93.3
135.4
27.7
107.7
2,069.0
618.3
1.1
617.2
840.0
78.2
466.9
294.9
303.8
60.5
2,727.9
636.9
400.1
22.6
377.5
248.8
128.7
34.4
55.8
38.5
236.8
101.7
135.1
27.9
107.2
2,091.1
628.2
1.1
627.1
852.5
80.8
474.6
297.2
305.6
57.2
2,723.5
637.6
399.3
20.4
378.8
248.9
129.9
35.0
55.4
39.6
238.3
104.0
134.3
27.8
106.6
2,085.9
628.3
1.1
627.2
850.9
80.2
474.6
296.1
304.5
56.2
2,725.7
637.3
401.2
24.4
376.8
248.4
128.4
34.1
56.0
38.4
236.1
101.6
134.5
27.9
106.7
2,088.4
631.3
1.1
630.2
850.9
80.6
473.7
296.5
305.5
55.6
2,726.3
635.0
399.0
22.5
376.5
247.8
128.7
34.7
55.8
38.2
236.0
100.4
135.6
28.0
107.6
2,091.3
626.0
1.1
624.9
853.5
81.1
474.5
297.9
305.2
57.9
2,739.1
638.8
402.0
23.9
378.1
249.8
128.3
34.5
56.4
37.4
236.8
100.7
136.1
28.0
108.1
2,100.3
627.9
1.1
626.8
857.5
81.6
477.0
299.0
306.6
59.0
51.4
17.5
11.8
9.2
47.6
18.0
12.7
10.3
64.8
20.2
12.7
10.4
54.7
20.4
12.7
10.5
49.7
22.5
12.8
10.4
47.3
22.2
12.9
10.4
38.3
22.2
12.9
10.6
37.2
20.0
12.9
10.7
35.6
20.6
12.9
10.6
35.9
19.7
12.9
10.7
36.9
21.0
12.9
10.7
40.7
18.3
12.9
10.7
11.3
93.8
119.6
149.4
12.5
99.2
128.7
146.2
12.0
83.0
130.9
148.4
11.4
79.2
133.5
144.5
11.5
77.8
133.3
149.7
11.5
77.4
132.9
158.2
11.8
77.7
133.4
153.8
11.9
78.2
133.9
158.0
11.8
77.0
133.7
152.5
11.7
76.2
133.7
162.7
12.1
79.2
133.8
153.7
12.1
79.4
134.3
163.9
92.3
57.1
154.4
240.3
78.6
67.6
158.8
248.6
76.7
71.8
172.1
258.7
70.6
73.9
171.5
281.0
76.0
73.7
162.5
292.6
82.3
75.9
151.7
280.6
79.8
74.0
166.6
281.1
84.1
73.9
159.6
287.7
79.2
73.2
151.2
286.2
86.7
76.0
150.9
285.6
81.5
72.1
142.0
285.7
89.5
74.3
186.5
295.3
2,990.6
3,112.7
3,199.1
3,218.4
3,2373
3,234.4
3,262.9
3,294.5
3,274.7
3,286.2
3,269.0
3346.0
1,731.4
359.8
1,371.6
229.9
1,141.6
652.3
217.2
435.1
121.7
178.9
1,759.6
346.2
1,413.4
261.3
1,152.1
680.7
241.0
439.6
176.7
197.4
1,782.9
369.7
1,413.2
266.5
1,146.7
736.5
241.8
494.7
178.6
199.4
1,763.3
349.4
1,413.9
268.6
1,145.3
754.4
255.8
498.6
190.4
185.8
1,759.2
332.9
1,426.2
272.2
1,154.0
740.6
261.2
479.4
213.9
187.7
1,764.1
331.3
1,432.8
269.2
1,163.5
745.3
263.7
481.6
210.8
185.7
1,800.2
342.5
1,457.7
273.9
1,183.9
755.2
267.8
487.3
197.5
185.0
1,779.6
331.6
1,448.0
279.5
1,168.6
762.3
271.0
491.3
228.0
199.8
1,766.1
315.2
1,451.0
276.7
1,174.3
777.4
272.3
505.1
206.0
201.1
1,772.6
327.2
1,445.4
277.2
1,168.2
768.4
278.7
489.7
221.4
201.1
1,756.4
321.3
1,435.0
280.4
1,154.7
749.4
264.0
485.4
241.2
196.3
1,821.9
365.1
1,456.8
285.9
1,170.8
746.2
266.1
480.1
246.4
203.5
2,6843
2,814.4
2,8973
2,893.9
2,901.4
2,905.9
2,937.9
2,969.7
2,950.7
2,963.5
2,943.2
3,017.9
306.3
298.4
301.7
324.5
335.9
328.4
325.0
324.8
324.0
322.7
325.8
328.1
50.1
59.8
64.5
62.7
64.8
66.0
65.4
72.7
73.8
74.2
72.5
69.8
52.0
275.7
181.2
59.8
285.8
190.7
63.9
285.9
191.7
61.9
285.6
191.7
64.4
289.0
195.2
64.1
289.2
195.3
65.1
291.2
198.6
73.0
288.2
197.0
73.7
288.3
196.5
74.5
287.8
196.8
73.1
287.1
196.0
70.5
289.3
198.7
94.5
95.1
94.2
93.8
93.8
93.9
92.6
91.2
91.9
91.0
91.2
90.6
-6.0
24.0
-7.4
23.2
-7.8
23.6
-7.3
24.1
-8.4
24.4
-9.3
23.5
-9.2
23.8
-9.5
23.7
-9.4
23.7
-9.1
22.3
MEMO
95 Revaluation gains on off-balancesheet items 8
96 Revaluation losses on off-balancesheet items 8
97 Mortgage-backed securities®
98
Pass-through securities
99
CMOs, REMICs, and other
mortgage-backed securities . .
100 Net unrealized gains (losses) on
available-for-sale securities 10 . . .
101 Offshore credit to U.S. residents 11 . . .
Footnotes appear on p. A21.
.6
37.7
-5.8
24.8
Commercial Banking Institutions—Assets and Liabilities
1.26
COMMERCIAL BANKS IN THE UNITED STATES
A19
Assets and Liabilities 1 —Continued
D. Small domestically chartered commercial banks
Billions of dollars
Wednesday figures
Monthly averages
1999 r
1999
Account
May r
Nov.
2000
2000
Dec.
Jan.r
Feb.r
Mar.r
Apr.r
May
May 10
May 17
May 24
May 31
Seasonally adjusted
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Assets
Bank credit
Securities in bank credit
U.S. government securities
Other securities
Loans and leases in bank credit2
Commercial and industrial
Real estate
Revolving home equity
Other
Consumer
Security 3
Other loans and leases
Interbank loans
Cash assets 4
Other assets 5
16 Total assets 6
17
18
19
20
21
22
23
24
25
26
Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From others
Net due to related foreign offices
Other liabilities
....
27 Total liabilities
28 Residual (assets less liabilities) 7
1,487.5
437.4
323.8
113.7
1,050.1
193.3
596.2
29.3
567.0
189.8
4.7
66.1
52.0
67.7
72.4
1,566.0
447.8
329.3
118.5
1,118.2
210.7
639.5
30.9
608.6
194.3
5.4
68.3
52.7
70.0
81.0
1,577.7
446.5
326.8
119.7
1,131.2
212.3
645.7
31.3
614.4
198.5
5.3
69.4
52.6
73.3
82.1
1,602.3
452.4
333.5
118.9
1,149.8
217.0
655.7
32.2
623.5
202.9
5.1
69.2
52.3
69.8
85.1
1,620.9
456.6
338.0
118.7
1,164.3
219.9
666.0
32.9
633.1
203.7
5.2
69.5
53.8
68.7
83.4
1,634.2
454.8
335.6
119.2
1,179.4
223.8
674.7
33.5
641.1
204.8
5.4
70.7
53.4
68.6
83.2
1,640.8
453.6
333.6
119.9
1,187.2
225.9
680.1
34.0
646.1
204.7
5.7
70.8
60.3
68.9
84.8
1,654.8
455.1
333.2
121.9
1,199.7
228.5
688.9
34.5
654.3
206.9
5.3
70.1
56.7
71.4
88.5
1,646.3
453.6
332.6
121.0
1,192.7
227.4
685.1
34.3
650.8
205.3
5.3
69.6
56.8
70.8
87.9
1,656.1
455.6
334.0
121.6
1,200.5
228.5
689.0
34.5
654.5
207.0
5.3
70.7
57.9
71.4
90.3
1,658.6
456.7
334.0
122.7
1,201.9
228.9
690.3
34.6
655.7
207.7
5.1
69.9
55.4
69.5
90.0
1,662.6
455.4
332.3
123.1
1,207.1
229.6
693.1
34.8
658.3
208.7
5.3
70.4
56.2
74.5
87.5
1,660.4
1,750.0
1,765.7
1,789.5
1,806.6
1,818.9
1,834.0
1,850.4
1,840.8
1,854.6
1,8523
1,859.6
1,321.3
272.6
1,048.8
194.3
854.5
181.3
83.5
97.9
5.0
30.1
1,381.0
272.8
1,108.1
205.4
902.8
199.8
85.7
114.1
4.5
33.1
1,392.5
271.2
1,121.3
207.5
913.8
205.3
84.3
121.0
4.5
33.6
1,408.3
275.9
1,132.4
210.6
921.8
219.8
89.0
130.8
5.1
34.5
1,419.4
277.1
1,142.3
214.6
927.8
221.8
89.7
132.1
5.3
36.3
1,428.3
278.3
1,150.0
217.8
932.2
229.0
93.3
135.7
5.4
34.6
1,442.8
279.0
1,163.8
219.9
943.9
231.2
89.4
141.8
5.3
33.6
1,449.7
279.3
1,170.3
222.7
947.6
237.3
92.7
144.6
6.0
35.3
1,442.1
275.4
1,166.8
220.8
945.9
233.4
90.1
143.4
6.2
35.0
1,450.2
276.9
1,173.2
223.0
950.3
237.2
94.3
142.9
6.1
35.4
1,448.6
280.9
1,167.7
223.5
944.1
238.9
93.2
145.7
6.0
36.0
1,460.4
286.3
1,174.1
224.7
949.4
242.0
94.5
147.5
5.6
35.2
1,537.8
1,618.4
1,635.7
1,667.6
1,682.8
1,697.2
1,713.0
1,728.2
1,716.8
1,728.9
1,729.4
1,7433
122.6
131.6
130.0
121.9
123.9
121.7
121.1
122.2
124.1
125.7
122.9
116.4
Not seasonally adjusted
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
Assets
Bank credit
Securities in bank credit
U.S. government securities
Other securities
Loans and leases in bank credit2
Commercial and industrial
Real estate
Revolving home equity
Other
Consumer
Security 3
Other loans and leases
Interbank loans
Cash assets 4
Other assets 5
44 Total assets 6
45
46
47
48
49
50
51
52
53
54
Liabilities
Deposits
Transaction
Nontransaction
Large time
Other
Borrowings
From banks in the U.S
From others
Net due to related foreign offices
Other liabilities
55 Total liabilities
56 Residual (assets less liabilities)
MEMO
57 Mortgage-backed securities 9
Footnotes appear on p. A21.
7
....
1,494.9
441.6
327.2
114.3
1,053.3
195.7
596.9
29.2
567.6
190.0
4.7
66.1
48.0
67.4
71.5
1,565.7
446.1
327.5
118.6
1,119.6
209.6
641.4
31.1
610.3
194.8
5.4
68.5
57.6
73.0
82.2
1,578.1
446.1
326.2
119.9
1,132.0
211.9
645.1
31.5
613.6
200.8
5.3
69.0
56.9
77.6
81.7
1,595.9
450.7
332.0
118.8
1,145.2
216.1
653.3
32.2
621.2
203.5
5.1
67.2
52.5
71.2
83.1
1,608.2
453.4
335.5
117.9
1,154.9
218.8
661.3
32.7
628.7
202.7
5.2
66.8
55.0
68.3
82.5
1,628.1
455.8
336.9
119.0
1,172.2
223.9
671.5
33.3
638.2
202.9
5.4
68.5
56.5
66.6
83.1
1,644.2
458.0
336.9
121.1
1,186.2
228.1
678.7
33.9
644.8
203.8
5.7
69.9
61.9
68.2
85.6
1,661.6
458.9
336.4
122.4
1,202.7
231.1
689.1
34.5
654.7
207.0
5.3
70.1
52.7
71.2
87.6
1,653.8
458.5
336.7
121.8
1,195.3
230.3
685.0
34.3
650.7
205.3
5.3
69.4
54.1
68.1
87.8
1,663.4
459.3
337.2
122.1
1,204.1
231.3
689.4
34.5
654.9
207.3
5.3
70.7
53.4
69.0
87.1
1,666.0
460.3
337.3
123.0
1,205.7
231.4
691.3
34.6
656.8
207.9
5.1
69.9
49.1
66.9
86.6
1,668.0
458.0
334.7
123.3
1,210.0
232.0
693.5
34.7
658.8
208.6
5.3
70.7
53.2
81.0
89.5
1,66Z7
1,758.7
1,7743
1,782.6
1,793.8
1,813.7
1,8393
1,852.2
1,843.0
1,852.0
1,847.5
1,870.5
1,321.1
270.0
1,051.0
194.3
856.8
182.2
83.0
99.2
5.0
30.1
1,392.0
276.4
1,115.5
205.4
910.2
201.1
86.2
114.9
4.5
33.1
1,401.3
282.0
1,119.3
207.5
911.8
207.8
85.8
122.0
4.5
33.7
1,403,4
277.5
1,125.8
210.6
915.2
218.2
88.4
129.8
5.1
34.2
1,410.9
273.6
1,137.2
214.6
922.7
217.6
87.1
130.5
5.3
36.7
1,426.3
276.1
1,150.3
217.8
932.4
222.9
89.8
133.1
5.4
34.9
1,450.0
280.8
1,169.2
219.9
949.2
227.5
87.0
140.5
5.3
34.3
1,448.9
276.8
1,172.1
222.7
949.4
238.7
92.2
146.5
6.0
35.3
1,442.4
271.1
1,171.2
220.8
950.4
235.2
89.2
146.0
6.2
35.3
1,447.1
272.2
1,174.9
223.0
951.9
239.7
94.1
145.6
6.1
35.2
1,440.1
272.6
1,167.6
223.5
944.1
240.2
92.8
147.4
6.0
35.9
1,467.0
292.3
1,174.8
224.7
950.0
241.8
93.7
148.1
5.6
35.0
1,538.4
1,630.7
1,6473
1,660.8
1,670.4
1,689.5
1,717.1
1,728.9
1,719.0
1,728.2
1,7212
1,749.5
124.3
128.1
127.0
121.8
123.4
124.2
122.1
123.3
124.0
123.8
125.3
121.0
59.8
62.4
61.9
62.9
64.1
65.2
67.6
69.2
69.4
69.4
69.2
68.8
A20
1.26
Domestic Financial Statistics • August 2000
COMMERCIAL BANKS IN THE UNITED STATES
Assets and Liabilities 1 —Continued
E. Foreign-related institutions
Billions of dollars
Monthly averages
Account
1999r
1999
Mayr
Nov.
Wednesday figures
2000
Dec.
Jan.r
Feb.
Mar.r
2000
Apr/
May
May 10
May 17
May 24
May 31
Seasonally adjusted
1
2
3
4
5
6
7
8
9
10
11
12
Assets
Bank credit
Securities in bank credit
U.S. government securities
Other securities
Loans and leases in bank credit2 . . .
Commercial and industrial
Real estate
Security3
Other loans and leases
Interbank loans
Cash assets4
Other assets5
13 Total assets 6
14
15
16
17
18
19
20
21
Liabilities
Deposits
Transaction
Nontransaction
Borrowings
From banks in the U.S
From others
Net due to related foreign offices
Other liabilities
22 Total liabilities
23 Residual (assets less liabilities)7
537.6
193.8
86.6
107.2
343.8
202.1
19.5
52.6
69.6
26.5
37.5
35.4
538.5
192.3
78.5
113.9
346.2
196.2
17.3
65.4
67.3
25.2
48.8
34.8
548.3r
202.3
80.7
121.6
345.9
193.4
17.0
67.1
68.5
29.5
53.5
36.6
547.1
200.4
80.5
119.8
346.8
194.9
17.4
66.6
67.8
28.9
55.4
38.6
539.9
191.2
75.3
115.9
348.7
196.7
17.7
66.6
67.7
32.6
54.5
38.2
543.4
194.2
77.4
116.8
349.2
198.2
18.1
66.3
66.6
28.3
51.8
39.1
567.4
200.6
78.8
121.8
366.8
201.8
18.5
77.6
69.0
29.3
51.8
39.7
581.0
206.7
78.9
127.9
374.3
207.7
18.7
80.6
67.3
31.6
48.1
40.8
582.0
206.3
77.3
129.0
375.7
206.9
18.4
80.8
69.5
34.6
47.9
41.0
576.1
204.3
77.3
127.0
371.8
207.3
18.7
77.9
67.8
35.6
48.7
38.8
582.8
209.7
82.0
127.7
373.1
209.0
18.9
79.0
66.2
27.8
47.9
43.1
583.7
206.1
79.5
126.6
377.6
208.1
19.0
85.7
64.7
27.4
47.0
40.8
636.7
647.1
667.6r
669.7
664.8
6623
687.9
7013
705.2
698.9
701.4
6983
314.7
10.8
303.9
175.9
21.9
154.0
79.6
59.4
355.3
10.4
345.0
186.0
26.1
159.8
45.0
67.2
374.2
10.5
363.6
181.5
24.4
157.1
39.1
69.4r
380.8
10.8
370.0
180.0
19.7
160.2
35.6
70.0
380.6
11.1
369.5
176.2
18.3
157.9
26.8
71.5
383.1
11.3
371.8
178.1
19.5
158.6
19.9
69.2
393.6
11.1
382.5
200.9
20.7
180.3
14.9
70.7
388.4
11.5
376.9
205.9
17.7
188.2
20.1
77.2
399.2
11.4
387.8
206.5
18.9
187.6
14.4
77.0
386.4
375.3
200.4
16.3
184.1
23.0
79.8
383.9
11.7
372.2
207.0
14.6
192.4
17.0
80.0
378.0
11.9
366.0
210.9
20.5
190.4
29.9
72.2
629.7
653.4
664.2r
6663
655.1
6503
680.2
691.7
697.1
689.6
687.8
690.9
7.1
-6.3
3.4
3.3
9.7
11.9
7.8
9.6
8.1
9.3
13.5
7.6
11.0
Not seasonally adjusted
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
Assets
Bank credit
Securities in bank credit
U.S. government securities
Trading account
Investment account
Other securities
Trading account
Investment account
Loans and leases in bank credit2 . . .
Commercial and industrial
Real estate
Security3
Other loans and leases
Interbank loans
Cash assets4
Other assets5
40 Total assets 6
41
42
43
44
45
46
47
48
Liabilities
Deposits
Transaction
Nontransaction
Borrowings
From banks in the U.S
From others
Net due to related foreign offices
Other liabilities
....
49 Total liabilities
50 Residual (assets less liabilities)7
MEMO
51 Revaluation gains on off-balance-sheet
items8
52 Revaluation losses on off-balancesheet items8
Footnotes appear on p. A21.
530.9
192.0
87.6
19.2
68.5
104.4
62.6
41.8
338.9
198.2
19.5
52.5
68.7
26.5
36.6
35.0
551.1
201.8
80.0
8.5
71.5
121.8
80.3
41.5
349.3
199.2
17.4
64.8
67.9
25.2
51.8
34.9
558.3r
206. l r
82.1
6.7
75.4
124.0r
80.7
43.2
352.2
197.0
16.9
67.5
70.8
29.5
57.8
38.7
554.9
204.3
81.1
7.9
73.2
123.2
78.2
45.0
350.7
196.4
17.6
67.0
69.6
28.9
57.8
40.0
544.1
192.5
75.4
7.4
68.1
117.0
74.3
42.8
351.6
199.2
18.0
66.4
68.1
32.6
53.9
40.1
542.0
191.3
77.2
9.5
67.7
114.0
71.8
42.3
350.7
199.9
18.3
66.5
66.1
28.3
50.7
40.3
561.1
197.0
79.5
12.0
67.5
117.5
74.8
42.7
364.1
200.0
18.3
77.6
68.2
29.3
49.6
39.0
572.6
203.7
79.9
12.5
67.3
123.9
81.3
42.6
368.9
203.4
18.7
80.5
66.4
31.6
46.8
40.2
574.4
204.2
78.7
11.2
67.5
125.5
82.8
42.7
370.1
202.8
18.4
80.7
68.3
34.6
46.2
41.2
566.8
200.4
77.8
10.7
67.1
122.6
80.4
42.2
366.4
203.4
18.6
77.4
66.9
35.6
47.3
38.5
571.5
205.6
82.5
15.3
67.1
123.1
80.4
42.7
365.9
203.6
18.8
78.6
64.8
27.8
46.2
42.0
577.5
204.1
80.4
13.1
67.3
123.6
80.9
42.7
373.5
204.0
18.9
85.9
64.7
27.4
46.9
39.7
628.7
662.6
684.C
6813
6703
661.1
678.7
691.0
696.0
687.8
687.1
691.2
315.7
10.4
305.4
175.9
21.9
154.0
75.3
58.4
358.0
10.5
347.5
186.0
26.1
159.8
46.7
68.2
382.6
11.1
371.5
181.5
24.4
157.1
44.3
71.5r
387.7
11.0
376.7
180.0
19.7
160.2
37.9
71.7
387.7
389.3
11.1
378.2
178.1
19.5
158.6
20.5
69.5
394.7
10.7
384.0
200.9
20.7
180.3
10.2
68.9
389.3
376.7
176.2
18.3
157.9
29.1
73.5
378.2
205.9
17.7
188.2
15.9
75.8
400.1
10.8
389.3
206.5
18.9
187.6
9.5
75.9
385.7
10.5
375.2
200.4
16.3
184.1
19.2
78.3
385.2
11.1
374.1
207.0
14.6
192.4
12.4
78.1
379.0
11.8
367.2
210.9
20.5
190.4
26.3
71.0
6253
658.8
680.0"
6773
666.4
657.4
674.8
686.8
692.0
683.6
682.8
687.2
3.3
3.8
4.1
4.0
3.9
3.7
3.9
4.1
4.0
4.2
4.3
4.0
34.2
41.0
39.6r
39.7
40.1
39.3
39.3
44.7
45.3
46.9
44.9
41.7
33.7
39.9
38.6r
39.0
40.0
38.2
38.4
44.3
44.6
46.9
44.6
40.9
11.0
11.0
Commercial Banking Institutions—Assets and Liabilities
A21
NOTES TO TABLE 1.26
NOTE. Tables 1.26, 1.27, and 1.28 have been revised to reflect changes in the Board's H.8
statistical release, "Assets and Liabilities of Commercial Banks in the United States." Table
1.27, "Assets and Liabilities of Large Weekly Reporting Commercial Banks," and table 1.28,
"Large Weekly Reporting U.S. Branches and Agencies of Foreign Banks," are no longer
being published in the Bulletin. Instead, abbreviated balance sheets for both large and small
domestically chartered banks have been included in table 1.26, parts C and D. Data are both
merger-adjusted and break-adjusted. In addition, data from large weekly reporting U.S.
branches and agencies of foreign banks have been replaced by balance sheet estimates of all
foreign-related institutions and are included in table 1.26, part E. These data are breakadjusted.
The not-seasonally-adjusted data for all tables now contain additional balance sheet items,
which were available as of October 2, 1996.
1. Covers the following types of institutions in the fifty states and the District of
Columbia: domestically chartered commercial banks that submit a weekly report of condition
(large domestic); other domestically chartered commercial banks (small domestic); branches
and agencies of foreign banks, and Edge Act and agreement corporations (foreign-related
institutions). Excludes International Banking Facilities. Data are Wednesday values or pro
rata averages of Wednesday values. Large domestic banks constitute a universe; data for
small domestic banks and foreign-related institutions are estimates based on weekly samples
and on quarter-end condition reports. Data are adjusted for breaks caused by reclassifications
of assets and liabilities.
The data for large and small domestic banks presented on pp. A 1 7 - 1 9 are adjusted to
remove the estimated effects of mergers between these two groups. The adjustment for
mergers changes past levels to make them comparable with current levels. Estimated
quantities of balance sheet items acquired in mergers are removed from past data for the bank
group that contained the acquired bank and put into past data for the group containing the
acquiring bank. Balance sheet data for acquired banks are obtained from Call Reports, and a
ratio procedure is used to adjust past levels.
2. Excludes federal funds sold to, reverse RPs with, and loans made to commercial banks
in the United States, all of which are included in "Interbank loans."
3. Consists of reverse RPs with brokers and dealers and loans to purchase and carry
securities.
4. Includes vault cash, cash items in process of collection, balances due from depository
institutions, and balances due from Federal Reserve Banks.
5. Excludes the due-from position with related foreign offices, which is included in "Net
due to related foreign offices."
6. Excludes unearned income, reserves for losses on loans and leases, and reserves for
transfer risk. Loans are reported gross of these items.
7. This balancing item is not intended as a measure of equity capital for use in capital
adequacy analysis. On a seasonally adjusted basis this item reflects any differences in the
seasonal patterns estimated for total assets and total liabilities.
8. Fair value of derivative contracts (interest rate, foreign exchange rate, other commodity and
equity contracts) in a gain/loss position, as determined under FASB Interpretation No. 39.
9. Includes mortgage-backed securities issued by U.S. government agencies, U.S.
government-sponsored enterprises, and private entities.
10. Difference between fair value and historical cost for securities classified as availablefor-sale under FASB Statement No. 115. Data are reported net of tax effects. Data shown are
restated to include an estimate of these tax effects.
11. Mainly commercial and industrial loans but also includes an unknown amount of credit
extended to other than nonfinancial businesses.
A22
1.32
DomesticNonfinancialStatistics • August 2000
COMMERCIAL PAPER A N D BANKERS DOLLAR ACCEPTANCES OUTSTANDING
A. Commercial Paper
Millions of dollars, seasonally adjusted, end of period
1999
Year ending December
2000
Item
1 All issuers
2
3
Financial companies'
Dealer-placed paper, total 2
Directly placed paper, total3
4 Nonfinancial companies4
1995
1996
1997
1998
1999
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
674,904
775,371
966,699
1,163,303
1,403,023
1,369,100
1,403,023
1,407,789
1,428,605
1,449,143
1,465,697
275,815
210,829
361,147
229,662
513,307
252,536
614,142
322,030
786,643
337,240
802,194
299,777
786,643
337,240
821,870
299,599
835,140
298,603
849,198
302,885
860,843
294,328
188,260
184,563
200,857
227,132
279,140
267,128
279,140
286,319
294,863
297,060
310,526
1. Institutions engaged primarily in commercial, savings, and mortgage banking; sales,
personal, and mortgage financing; factoring, finance leasing, and other business lending;
insurance underwriting; and other investment activities.
2. Includes all financial-company paper sold by dealers in the open market.
3. As reported by financial companies that place their paper directly with investors.
4. Includes public utilities and firms engaged primarily in such activities as communications, construction, manufacturing, mining, wholesale and retail trade, transportation, and
services.
B. Bankers Dollar Acceptances 1
Millions of dollars, not seasonally adjusted, year ending September2
Item
1 Total amount of reporting banks' acceptances in existence
2 Amount of other banks' eligible acceptances held by reporting banks
3 Amount of own eligible acceptances held by reporting banks (included in item 1)
4 Amount of eligible acceptances representing goods stored in, or shipped between, foreign countries
(included in item 1)
1. Includes eligible, dollar-denominated bankers acceptances legally payable in the United
States. Eligible acceptances are those that are eligible for discount by Federal Reserve Banks;
that is, those acceptances that meet the criteria of Paragraph 7 of Section 13 of the Federal
Reserve Act (12 U.S.C. §372).
1.33
PRIME RATE CHARGED B Y B A N K S
1996
1997
1998
1999
25,832
25,774
14,363
10,094
709
7,770
736
6,862
523
4,884
461
4,261
9,361
10,467
5,413
3,498
2. Data on bankers dollar acceptances are gathered from approximately 55 institutions;
includes U.S. chartered commerical banks (domestic and foreign offices), U.S. branches and
agencies of foreign banks, and Edge and agreement corporations. The reporting group is
revised every year.
Short-Term Business Loans 1
Percent per year
Date of change
Rate
1997—Jan.
1
Mar. 26
8.25
8.50
1998—Sept. 30
Oct. 16
Nov. 18
8.25
8.00
7.75
1999—July 1
Aug. 25
Nov. 17
8.00
8.25
8.50
2000—Feb. 3
Mar. 22
May 17
8.75
9.00
9.50
Period
Average
rate
1997
1998
1999 ....
8.44
8.35
8.00
1997—Jan
Feb
Mar
Apr.
May
June
July
Aug
Sept
Oct
Nov
Dec
8.25
8.25
8.30
8.50
8.50
8.50
8.50
8.50
8.50
8.50
8.50
8.50
1. The prime rate is one of several base rates that banks use to price short-term business
loans. The table shows the date on which a new rate came to be the predominant one quoted
by a majority of the twenty-five largest banks by asset size, based on the most recent Call
Period
1998—Jan
Feb
Mar.
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
Average
rate
8.50
8.50
8.50
8.50
8.50
8.50
8.50
8.50
8.49
8.12
7.89
7.75
Period
Average
rate
1999—Jan
Feb
Mar
Apr.
May
June
July
Aug
Sept
Oct
Nov
Dec
7.75
7.75
7.75
7.75
7.75
7.75
8.00
8.06
8.25
8.25
8.37
8.50
2000—Jan.
Feb
Mar
Apr
May
June
8.50
8.73
8.83
9.00
9.24
9.50
Report. Data in this table also appear in the Board's H.15 (519) weekly and G.13 (415)
monthly statistical releases. For ordering address, see inside front cover.
Financial Markets
1.35
INTEREST RATES
A23
Money and Capital Markets
Percent per year; figures are averages of business day data unless otherwise noted
2000, week ending
2000
Item
1997
1998
1999
Feb.
Mar.
Apr.
May
Apr. 28
May 5
May 12
May 19
May 26
MONEY MARKET INSTRUMENTS
1 Federal funds 1 ' 2 ' 3
2 Discount window borrowing 2,4
5.46
5.00
5.35
4.92
4.97
4.62
5.73
5.24
5.85
5.34
6.02
5.50
6.27
5.71
5.97
5.50
6.06
5.50
5.96
5.50
6.16
5.50
6.50
5.93
3
4
5
Commercial paper•3'5,6
Nonfinancial
1-month
2-month
3-month
5.57
5.57
5.56
5.40
5.38
5.34
5.09
5.14
5.18
5.76
5.81
5.87
5.93
5.96
6.00
6.02
6.06
6.11
6.40
6.47
6.54
6.06
6.11
6.17
6.24
6.33
6.41
6.37
6.45
6.54
6.47
6.52
6.59
6.48
6.54
6.61
6
7
8
Financial
1-month
2-month
3-month
5.59
5.59
5.60
5.42
5.40
5.37
5.11
5.16
5.22
5.78
5.84
5.90
5.94
5.98
6.03
6.03
6.07
6.15
6.41
6.50
6.57
6.05
6.13
6.23
6.25
6.36
6.43
6.39
6.47
6.57
6.49
6.55
6.63
6.49
6.57
6.64
5.54
5.58
5.62
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
5.44
5.48
5.48
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
5.54
5.57
5.39
5.30
5.24
5.30
5.94
6.11
6.06
6.22
6.19
6.32
6.60
6.76
6.23
6.37
6.39
6.56
6.61
6.75
6.67
6.81
6.67
6.86
5.54
5.62
5.73
5.49
5.47
5.44
5.19
5.33
5.46
5.83
6.01
6.26
6.01
6.14
6.36
6.10
6.28
6.50
6.49
6.71
6.94
6.17
6.36
6.58
6.35
6.57
6.79
6.48
6.69
6.90
6.55
6.75
7.00
6.55
6.77
7.01
5.61
5.45
5.31
6.02
6.13
6.25
6.70
6.33
6.56
6.67
6.74
6.78
5.06
5.18
5.32
4.78
4.83
4.80
4.64
4.75
4.81
5.55
5.72
5.84
5.69
5.85
5.86
5.66
5.81
5.80
5.79
6.10
5.94
5.62
5.79
5.82
5.74
5.96
5.89
5.94
6.15
6.01
5.86
6.17
6.01
5.73
6.11
5.89
5.07
5.18
5.36
4.81
4.85
4.85
4.66
4.76
4.78
5.57
5.75
5.91
5.72
5.85
5.84
5.67
5.82
n.a.
5.92
6.12
n.a.
5.62
5.75
n.a.
5.78
5.94
n.a.
6.02
6.15
n.a.
6.07
6.25
n.a.
5.81
6.13
n.a.
5.63
5.99
6.10
6.22
6.33
6.35
6.69
6.61
5.05
5.13
5.14
5.15
5.28
5.26
5.72
5.58
5.08
5.43
5.49
5.55
5.79
5.65
6.20
5.87
6.22
6.61
6.65
6.68
6.72
6.52
6.54
6.23
6.22
6.53
6.53
6.50
6.51
6.26
6.38
6.05
6.15
6.40
6.36
6.26
6.27
5.99
6.18
5.85
6.33
6.81
6.77
6.69
6.69
6.44
6.55
6.15
6.19
6.53
6.49
6.42
6.41
6.15
6.28
5.95
6.24
6.76
6.72
6.66
6.65
6.40
6.48
6.10
6.38
6.86
6.82
6.74
6.75
6.50
6.61
6.20
6.40
6.89
6.84
6.74
6.75
6.49
6.59
6.19
6.28
6.77
6.72
6.65
6.66
6.42
6.54
6.14
6.67
5.69
6.14
6.49
6.33
6.14
6.49
6.24
6.42
6.55
6.53
6.48
5.32
5.50
5.52
4.93
5.14
5.09
5.28
5.70
5.43
5.88
6.35
6.00
5.68
6.19
5.83
5.60
6.18
5.75
5.87
6.53
6.00
5.71
6.32
5.82
5.79
6.42
5.93
5.92
6.56
6.02
5.89
6.58
6.05
5.89
6.55
6.01
7.54
6.87
7.45
7.96
7.99
7.98
8.41
8.07
8.26
8.45
8.50
8.43
40
41 Aa
47 A
43 Baa
7.27
7.48
7.54
7.87
6.53
6.80
6.93
7.22
7.05
7.36
7.53
7.88
7.68
7.82
8.02
8.29
7.68
7.83
8.07
8.37
7.64
7.82
8.07
8.40
7.99
8.24
8.49
8.90
7.70
7.91
8.16
8.51
7.87
8.09
8.35
8.74
8.04
8.28
8.54
8.93
8.07
8.33
8.59
9.02
8.00
8.26
8.52
8.95
MEMO
Dividend-price
ratio17
44 Common stocks
1.77
1.49
1.25
1.21
1.18
1.14
1.17
1.14
1.17
1.20
1.14
1.18
3,5,7
9
10
11
Commercial paper (historical)
1-month
3-month
6-month
12
13
14
Finance paper, directly placed
1-month
3-month
6-month
15
16
Bankers
acceptances3,5,9
3-month
6-month
17
18
19
Certificates of deposit, secondary
1-month
3-month
6-month
(historical)3,5,8
market3,10
20 Eurodollar deposits, 3-month 3,11
74
75
26
U.S. Treasury bills
Secondary market 3,5
3-month
6-month
1-year
Auction high 3 , 5 , 1 2
3-month
6-month
1-year
77
78
79
30
31
37
33
34
Constant
maturities13
1-year
2-year
3-year
5-year
7-year
10-year
20-year
30-year
71
77
23
U.S. TREASURY NOTES AND BONDS
Composite
35 More than 10 years (long-term)
STATE AND LOCAL NOTES AND BONDS
series14
36
37 Baa
38 Bond Buyer series 15
Moody's
CORPORATE BONDS
39 Seasoned issues, all industries 16
Rating group
NOTE. Some of the data in this table also appear in the Board's H.15 (519) weekly and
G.13 (415) monthly statistical releases. For ordering address, see inside front cover.
1. The daily effective federal funds rate is a weighted average of rates on trades through
New York brokers.
2. Weekly figures are averages of seven calendar days ending on Wednesday of the
current week; monthly figures include each calendar day in the month.
3. Annualized using a 360-day year or bank interest.
4. Rate for the Federal Reserve Bank of New York.
5. Quoted on a discount basis.
6. Interest rates interpolated from data on certain commercial paper trades settled by the
Depository Trust Company. The trades represent sales of commercial paper by dealers or
direct issuers to investors (that is, the offer side). See Board's Commercial Paper Web pages
(http://www.federalreserve.gov/releases/cp) for more information.
7. An average of offering rates on commercial paper for firms whose bond rating is AA or
the equivalent. Series ended August 29, 1997.
8. An average of offering rates on paper directly placed by finance companies. Series
ended August 29, 1997.
9. Representative closing yields for acceptances of the highest-rated money center banks.
10. An average of dealer offering rates on nationally traded certificates of deposit.
11. Bid rates for Eurodollar deposits collected around 9:30 a.m. Eastern time. Data are for
indication purposes only.
12. Auction date for daily data; weekly and monthly averages computed on an issue-date
basis. On or after October 28, 1998, data are stop yields from uniform-price auctions. Before
that, they are weighted average yields from multiple-price auctions.
13. Yields on actively traded issues adjusted to constant maturities. Source: U.S. Department of the Treasury.
14. General obligation bonds based on Thursday figures; Moody's Investors Service.
15. State and local government general obligation bonds maturing in twenty years are used
in compiling this index. The twenty-bond index has a rating roughly equivalent to Moodys'
A1 rating. Based on Thursday figures.
16. Daily figures from Moody's Investors Service. Based on yields to maturity on selected
long-term bonds.
17. Standard & Poor's corporate series. Common stock ratio is based on the 500 stocks in
the price index.
A24
1.36
DomesticNonfinancialStatistics • August 2000
STOCK MARKET
Selected Statistics
1999
Indicator
1997
2000
1999
Sept.
Nov.
Oct.
Dec.
Jan.
Feb.
Mar.
Apr.
May
Prices and trading volume (averages of daily figures)
Common stock prices (indexes)
1 New York Stock Exchange
(Dec. 31, 1965 = 50)
Industrial
2
Transportation
3
4
Utility
5
Finance
456.99
574.97
415.08
143.87
424.84
550.65
684.35
468.61
190.52
516.65
619.52
775.29
491.62
284.82
530.97
607.87
769.47
462.33
237.71
493.37
599.04
753.94
450.13
285.16
490.92
634.22
791.41
474.78
502.58
539.20
638.17
808.28
461.04
511.78
510.99
634.07
814.73
456.35
485.82
495.23
606.03
767.08
398.69
482.30
471.65
622.28
790.35
384.39
509.59
491.29
646.82
822.76
406.14
502.78
524.05
640.07
814.75
411.50
487.17
523.22
6 Standard & Poor's Corporation
( 1 9 4 1 - 4 3 = 10)'
873.43
1,085.50
1,327.33
1,318.17
1,300.01
1,390.99
1,428.68
1,425.59
1,388.88
1,442.21
1,461.36
1,418.48
7 American Stock Exchange
(Aug. 31, 1973 = 50) 2
628.34
682.69
770.90
788.74
786.96
819.60
838.24
878.73
910.00
1,014.03
918.77
917.76
523,254
24,390
666,534
28,870
799,554
32,629
772,627
32,540
882,422
35,762
866,281
33,330
884,141
41,076
1,058,021
47,530
1,032,791
51,134
1,124,097
59,449
1,047,960
63,054
893,896
44,146
Volume of trading (thousands of shares)
8 New York Stock Exchange
9 American Stock Exchange
Customer financing (millions of dollars, end-of-period balances)
10 Margin credit at broker-dealers'
Free credit balances at brokers4
11 Margin accounts5
12 Cash accounts
126,090
140,980
228,530
179,316
182,272
206,280
228,530
243,490
265,210
278,530
251,700
240,660
31,410
52,160
40,250
62,450
55,130
79,070
47,125
62,810
51,040
61,085
49,480
68,200
55,130
79,070
57,800
75,760
56,470
79,700
65,020
85,530
65,930
76,190
66,170
73,500
Margin requirements (percent of market value and effective date)6
13 Margin stocks
14 Convertible bonds
15 Short sales
Mar. 11, 1968
June 8, 1968
May 6, 1970
Dec. 6, 1971
Nov. 24, 1972
70
50
70
80
60
80
65
50
65
55
50
55
65
50
65
1. In July 1976 a financial group, composed of banks and insurance companies, was added
to the group of stocks on which the index is based. The index is now based on 400 industrial
stocks (formerly 425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and
40 financial.
2. On July 5, 1983, the American Stock Exchange rebased its index, effectively cutting
previous readings in half.
3. Since July 1983, under the revised Regulation T, margin credit at broker-dealers has
included credit extended against stocks, convertible bonds, stocks acquired through the
exercise of subscription rights, corporate bonds, and government securities. Separate reporting of data for margin stocks, convertible bonds, and subscription issues was discontinued in
April 1984.
4. Free credit balances are amounts in accounts with no unfulfilled commitments to
brokers and are subject to withdrawal by customers on demand.
5. Series initiated in June 1984.
Jan. 3, 1974
50
50
50
6. Margin requirements, stated in regulations adopted by the Board of Governors pursuant
to the Securities Exchange Act of 1934, limit the amount of credit that can be used to
purchase and carry "margin securities" (as defined in the regulations) when such credit is
collateralized by securities. Margin requirements on securities are the difference between the
market value (100 percent) and the maximum loan value of collateral as prescribed by the
Board. Regulation T was adopted effective Oct. 15, 1934; Regulation U, effective May 1,
1936; Regulation G, effective Mar. 11, 1968; and Regulation X, effective Nov. 1, 1971.
On Jan. 1, 1977, the Board of Governors for the first time established in Regulation T the
initial margin required for writing options on securities, setting it at 30 percent of the current
market value of the stock underlying the option. On Sept. 30, 1985, the Board changed the
required initial margin, allowing it to be the same as the option maintenance margin required
by the appropriate exchange or self-regulatory organization; such maintenance margin rules
must be approved by the Securities and Exchange Commission.
Federal Finance
1.38
A25
FEDERAL FISCAL A N D FINANCING OPERATIONS
Millions of dollars
Fiscal year
Calendar year
Type of account or operation
1999
1997
1998
Dec.
U.S. budget1
1 Receipts, total
On-budget
2
3
Off-budget
4 Outlays, total
On-budget
5
6
Off-budget
7 Surplus or deficit (—), total
On-budget
8
9
Off-budget
Source of financing (total)
10 Borrowing from the public
11 Operating cash (decrease, or increase ( - ) )
12 Other 2
MEMO
13 Treasury operating balance (level, end of
period)
14
Federal Reserve Banks
15
Tax and loan accounts
Jan.
Feb.
Mar.
Apr.
May
1,579,292
1,187,302
391,990
1,601,235
1,290,609
310,626
-21,943
-103,307
81,364
1,721,798
1,305,999
415,799
1,652,552
1,335,948
316,604
69,246
-29,949
99,195
1,827,454
1,382,986
444,468
1,702,940
1,382,262
320,778
124,414
724
123,690
201,196
162,772
38,424
168,114
165,504
2,611
33,081
-2,732
35,813
189,478
143,838
45,640
127,326
97,451
29,875
62,152
46,387
15,765
108,675
71,090
37,585
150,409
118,340
32,069
-41,734
-47,250
5,516
135,582
94,586
40,996
170,962
137,864
33,099
-35,380
-43,278
7,897
295,148
244,662
50,486
135,651
105,742
29,909
159,497
138,920
20,577
146,002
107,469
38,533
149,612
114,829
34,783
-3,611
-7,360
3,750
38,171
604
-16,832
-51,211
4,743
-22,778
-88,304
-17,580
-18,530
35,749
-77,248
8,418
-83,985
20,592
1,241
17,131
40,773
-16,170
39,746
-22,808
18,442
-112,667
-47,787
957
-53,755
69,470
-12,104
43,621
7,692
35,930
38,878
4,952
33,926
56,458
6,641
49,817
83,327
28,402
54,925
62,735
6,119
56,615
21,962
5,004
16,958
44,770
4,357
40,413
92,557
15,868
76,689
23,087
5,445
17,642
1. Since 1990, off-budget items have been the social security trust funds (federal old-age
survivors insurance and federal disability insurance) and the U.S. Postal Service.
2. Includes special drawing rights (SDRs); reserve position on the U.S. quota in the
International Monetary Fund (IMF); loans to the IMF; other cash and monetary assets;
accrued interest payable to the public; allocations of SDRs; deposit funds; miscellaneous
liability (including checks outstanding) and asset accounts; seigniorage; increment on gold;
2000
1999
net gain or loss for U.S. currency valuation adjustment; net gain or loss for IMF loanvaluation adjustment; and profit on sale of gold.
SOURCE. Monthly totals: U S . Department of the Treasury, Monthly Treasury Statement of
Receipts and Outlays of the U.S. Government; fiscal year totals: U.S. Office of Management
and Budget, Budget of the U.S. Government.
A26
1.39
DomesticNonfinancialStatistics • August 2000
U.S. BUDGET RECEIPTS A N D OUTLAYS 1
Millions of dollars
Fiscal year
Calendar year
Source or type
1998
1998
1999
2000
1999
HI
H2
HI
H2
Mar.
Apr.
May
RECEIPTS
1 All sources
2 Individual income taxes, net
3
Withheld
4
Nonwithheld
5
Refunds
Corporation income taxes
6
Gross receipts
Refunds
7
8 Social insurance taxes, and contributions, net . . .
y
Employment taxes and contributions2
10
Unemployment insurance
11
Other net receipts'
12
13
14
15
Excise taxes
Customs deposits
Estate and gift taxes
Miscellaneous receipts4
1,721,798
1,827,454
922,630
825,057
966,045
892,266
135,582
295,148
146,002
828,586
646,483
281,527
99,476
879,480
693,940
308,185
122,706
447,514
316,309
219,136
87,989
392,332
339,144
65,204
12,032
481,907 r
351,068
240,278
109,467
425,451
372,012
68,302
14,841
44,789
75,161
7,855
38,239
184,237
56,113
155,452
27,343
63,687
65,946
23,349
25,619
213,008
24,593
571,831
540,014
27,484
4,333
216,324
31,645
611,833
580,880
26,480
4,473
109,353
14,220
312,713
293,520
17,080
2,112
104,163
14,250
268,466
256,142
10,121
2,202
106,861
17,092
324,831
306,235
16,378
2,216
110,111
13,996
292,551
280,059
10,173
2,319
27,546
3,273
53,329
52,565
317
447
30,256
2,562
68,022
65,095
2,557
370
7,427
1,654
60,394
49,212
10,778
403
57,673
18,297
24,076
32,658
70,414
18,336
27,782
34,929
29,922
8,546
12,971
15,829
33,366
9,838
12,359
18,735
31,015
8,440
14,915
15,140
34,262
10,287
14,001
19,569
5,722
1,681
2,379
3,412
5,934
1,503
4,243
3,515
5,391
1,598
2,480
6,678
OUTLAYS
16 All types
1,652,552
1,702,940
815,884
877,414
817,227
882,795
170,962
135,651
149,612
17
18
19
20
21
22
National defense
International affairs
General science, space, and technology
Energy
Natural resources and environment
Agriculture
268,456
13,109
18,219
1,270
22,396
12,206
274,873
15,243
18,125
912
23,970
23,011
129,351
4,610
9,426
957
10,051
2,387
140,196
8,297
10,142
699
12,671
16,757
134,414
6,879
9,319
797
10,351
9,803
149,820
8,530
10,089
-90
12,100
20,887
29 Ml'
859
1,725
-737
1,872
1,588
21,305
2,190
1,530
135
1,711
1,196
23,640
764
1,686
-167
1,839
615
23
24
25
26
Commerce and housing credit
Transportation
Community and regional development
Education, training, employment, and
social services
1,014
40,332
9.720
2,649
42,531
11,870
-2,483
16,196
4,863
4,046
20,836
6,972
-1,629
17,082
5,368
7,353
22,972
7,135
699
3,739
1,221
-1
3,178
1,561
1,063
3,892
1,047
27 Health
28 Social security and Medicare
29 Income security
30
31
32
33
34
Veterans benefits and services
Administration of justice
General government
Net interest5
Undistributed offsetting receipts6
54,919
56,402
25,928
27,762
29,003
27,532
6,656
4,496
5,143
131,440
572.047
233,202
141,079
580,488
237,707
65,053
286,305
125,196
67,838
316,809
109,481
69,320
261,146
74,490
295,030
113,504
14,333
54,344
29,211
12,421
46,309
17,801
12,532
52,741
19,342
41,781
43,212
25,924
15,771
229,735
-40,445
19,615
11,287
6,139
122,345
-21,340
22,750
12,041
9,136
116,954
-25,793
20,105
13,149
23,412
13,459
7,006
112,420
-22,850
5,957R
2,189
2,066
1,010
19,403
-2,849
4,028
2,616
1,201
21,325
-3,697
22,832
13,444
243,359
-47,194
1. Functional details do not sum to total outlays for calendar year data because revisions to
monthly totals have not been distributed among functions. Fiscal year total for receipts and
outlays do not correspond to calendar year data because revisions from the Budget have not
been fully distributed across months.
2. Old-age, disability, and hospital insurance, and railroad retirement accounts.
3. Federal employee retirement contributions and civil service retirement and
disability fund.
126,552
6,641
116,655
-17,724
2,647
1,942
19,002
-3,270
4. Deposits of earnings by Federal Reserve Banks and other miscellaneous receipts.
5. Includes interest received by trust funds.
6. Rents and royalties for the outer continental shelf, U.S. government contributions for
employee retirement, and certain asset sales.
SOURCE. Fiscal year totals: U.S. Office of Management and Budget, Budget of the U.S.
Government, Fiscal Year 2001; monthly and half-year totals: U.S. Department of the Treasury, Monthly Treasury Statement of Receipts and Outlays of the U.S. Government.
Federal Finance
1.40
A27
FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION
Billions of dollars, end of month
1998
1999
2000
Item
Mar. 31
June 30
Sept. 30
Dec. 31
Mar. 31
June 30
Sept. 30
Dec. 31
Mar. 31
1 Federal debt outstanding
5,573
5,578
5,556
5,643
5,681
5,668
5,685
5,805
5,802
2 Public debt securities
3
Held by public
4
Held by agencies
5,542
3,872
1,670
5,548
3,790
1,758
5,526
3,761
1,766
5,614
3,787
1,827
5,652
3,795
1,857
5,639
3,685
1,954
5,656
3,667
1,989
5,776
3,716
2,061
5,773
3,688
2,085
31
26
5
30
26
4
29
26
4
29
29
1
29
28
1
29
28
1
29
28
1
29
28
1
28
28
0
5,457
5,460
5,440
5,530
5,566
5,552
5,568
5,687
5,687
5,456
0
5,460
0
5,439
0
5,530
0
5,566
0
5,552
0
5,568
0
5,687
0
5,686
0
5,950
5,950
5,950
5,950
5,950
5,950
5,950
5,950
5,950
5 Agency securities
6
Held by public
7
Held by agencies
8 Debt subject to statutory limit
9 Public debt securities
10 Other debt1
MEMO
11 Statutory debt limit
1. Consists of guaranteed debt of U.S. Treasury and other federal agencies, specified
participation certificates, notes to international lending organizations, and District of Columbia stadium bonds.
1.41
GROSS PUBLIC DEBT OF U.S. TREASURY
SOURCE. U.S. Department of the Treasury, Monthly Statement of the Public Debt of the
United States and Treasury Bulletin.
Types and Ownership
Billions of dollars, end of period
1999
Type and holder
1 Total gross public debt
2
3
4
5
6
7
8
9
10
11
12
13
14
15
By type
Interest-bearing
Marketable
Bills
Notes
Bonds
Inflation-indexed notes and bonds1
Nonmarketable2
State and local government series
Foreign issues 3
Government
Public
Savings bonds and notes
Government account series4
Non-interest-bearing
By holder5
16 U.S. Treasury and other federal agencies and trust funds
17 Federal Reserve Banks
18 Private investors
Depository institutions
19
20
Mutual funds
21
Insurance companies
22
State and local treasuries6
Individuals
23
Savings bonds
24
Pension funds
Private
25
26
State and Local
27
Foreign and international7
Other miscellaneous investors6'8
28
1996
1998
2000
1999
Q2
Q3
Q4
Q1
5,323.2
5,502.4
5,614.2
5,776.1
5,638.8
5,656.3
5,776.1
5,773.4
5,317.2
3,459.7
777.4
2,112.3
555.0
n.a.
1,857.5
101.3
37.4
47.4
.0
182.4
1,505.9
6.0
5,494.9
3,456.8
715.4
2,106.1
587.3
33.0
2,038.1
124.1
36.2
36.2
.0
181.2
1,666.7
7.5
5,605.4
3,355.5
691.0
1,960.7
621.2
50.6
2,249.9
165.3
34.3
34.3
.0
180.3
1,840.0
8.8
5,766.1
3,281.0
737.1
1,784.5
643.7
68.2
2,485.1
165.7
31.3
31.3
.0
179.4
2,078.7
10.0
5,629.5
3,248.5
647.8
1,868.5
632.5
59.9
2,381.0
172.6
30.9
30.9
.0
180.0
1,967.5
9.3
5,647.2
3,233.0
653.2
1,828.8
643.7
67.6
2,414.2
168.1
31.0
31.0
.0
180.0
2,005.2
9.0
5,766.1
3,281.0
737.1
1,784.5
643.7
68.2
2,485.1
165.7
31.3
31.3
.0
179.4
2,078.7
10.0
5,763.8
3,261.2
753.3
1,732.6
653.0
74.7
2,502.6
161.9
28.8
28.8
.0
178.6
2,103.3
9.60
1,497.2
410.9
3,431.2
296.6
315.8
214.1
257.0
1,655.7
451.9
3,414.6
300.3
321.5
176.6
239.3
1,826.8
471.7
3,334.0
237.3
343.2
144.5
269.3
2,060.6
477.7
3,233.9
245.1
350.9
136.2
266.8
1,953.6
493.8
3,199.2r
240.6
335.4
142.5
279.1
1,989.1
496.5
3,175.4r
239.3r
336.9r
138.6r
271.6
2,060.6
477.7
3,233.9
245.1
350.9
136.2
266.8
2,085.4
501.7
3,182.8
n.a.
n.a.
n.a.
n.a.
187.0
392.7
189.2
203.5
1,102.1
665.9
186.5
421.0
204.1
216.9
1,241.6
527.9
186.7
434.7
218.1
216.6
1,278.7
439.6
186.5
445.1
232.8
212.3
1,268.8
334.5
186.6
449.1
226.6
222.5
1,258.6
307.3 r
186.2r
444.8 r
228.3
216.5 r
1,281.3
276.7 r
186.5
445.1
232.8
212.3
1,268.8
334.5
185.3
n.a.
n.a.
n.a.
1,274.0
n.a.
1. The U.S. Treasury first issued inflation-indexed securities during the first quarter of 1997.
2. Includes (not shown separately) securities issued to the Rural Electrification Administration, depository bonds, retirement plan bonds, and individual retirement bonds.
3. Nonmarketable series denominated in dollars, and series denominated in foreign currency held by foreigners.
4. Held almost entirely by U.S. Treasury and other federal agencies and trust funds.
5. Data for Federal Reserve Banks and U.S. government agencies and trust funds are actual
holdings; data for other groups are Treasury estimates.
6. In March 1996, in a redefinition of series, fully defeased debt backed by nonmarketable
federal securities was removed from "Other miscellaneous investors" and added to "State and
local treasuries." The data shown here have been revised accordingly.
1997
7. Includes nonmarketable foreign series treasury securities and treasury deposit funds.
Excludes treasury securities held under repurchase agreements in custody accounts at the
Federal Reserve Bank of New York.
8. Includes individuals, government-sponsored enterprises, brokers and dealers, bank
personal trusts and estates, corporate and noncorporate businesses, and other investors.
SOURCE. U.S. Treasury Department, data by type of security, Monthly Statement of the
Public Debt of the United States; data by holder, Treasury Bulletin.
A28
1.42
DomesticNonfinancialStatistics • August 2000
U.S. GOVERNMENT SECURITIES DEALERS
Transactions 1
Millions of dollars, daily averages
2000
2000, week ending
Item
Feb.
Mar.
Apr.
Apr. 5
Apr. 12
Apr. 19
Apr. 26
May 3
May 10
May 17
May 24
May 31
OUTRIGHT TRANSACTIONS2
1
2
3
4
5
6
7
8
9
By type of security
U.S. Treasury bills
Coupon securities, by maturity
Five years or less
More than five years
Inflation-indexed
Federal agency
Discount notes
Coupon securities, by maturity
One year or less
More than one year, but less than
or equal to five years
More than five years
Mortgage-backed
By type of counterparty
With interdealer broker
U.S. Treasury
Federal agency
Mortgage-backed
With other
13
U.S. Treasury
14
Federal agency
15
Mortgage-backed
10
11
12
31,065
33,838
27,907
34,575
26,377
27,818
26,445
24,872
19,335
22,827
21,223
29,554
116,615
87,516
937
102,265
65,123
1,022
114,115
69,668
1,201
133,292
81,807
1,527
110,349
83,550
833
118,971
71,056
1,331
91,814
46,844
1,043
127,230
58,932
1,623
113,583
69,457
915
114,737
60,045
600
125,687
50,707
656
100,865
51,980
670
53,679
56,650
58,111
54,853
49,733
58,531
65,757
67,597
63,775
79,742
59,625
60,053
999
1,310
1,220
1,530
1,112
1,221
1,149
1,166
1,039
1,531
933
502
8,722
7,723
67,758
7,906
8,816
59,390
9,675
8,295
72,104
10,884
11,601
60,795
10,409
10,955
119,830
8,343
7,192
55,177
8,950
4,031
42,864
10,802
7,971
70,554
7,107
6,275
89,251
7,638
8,649
68,603
10,215
6,827
41,711
8,139
4,907
36,075
122,906
7,958
27,071
101,083
8,127
22,089
108,736
9,029
26,543
125,501
10,661
23,420
118,917
10,176
40,455
113,062
9,524
19,714
81,173
6,385
20,368
102,449
7,766
25,873
104,819
8,057
31,154
100,706
8,949
27,020
97,750
8,495
19,995
88,357
6,338
14,940
113,227
63,165
40,687
101,164
66,554
37,301
104,155
68,271
45,561
125,700
68,207
37,375
102,191
62,034
79,375
106,115
65,762
35,463
84,973
73,502
22,495
110,209
79,770
44,681
98,472
70,139
58,096
97,503
88,611
41,583
100,523
69,105
21,716
94,713
67,262
21,135
FUTURES TRANSACTIONS3
By type of deliverable security
16 U.S. Treasury bills
Coupon securities, by maturity
17
Five years or less
18
More than five years
19 Inflation-indexed
Federal agency
20 Discount notes
Coupon securities, by maturity
21
One year or less
22
More than one year, but less than
or equal to five years
More than five years
23
24 Mortgage-backed
0
0
0
0
0
0
0
0
0
6,293
21,702
0
4,022
15,073
0
2,667
15,366
0
3,192
17,244
0
3,248
18,521
0
2,276
15,026
0
1,426
11,143
0
3,885
13,956
0
3,650
17,140
0
3,836
13,349
0
6,878
12,706
0
5,916
16,539
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
19
0
0
56
0
0
39
0
0
43
0
n.a.
79
0
0
0
55
0
0
43
0
0
67
0
0
160
0
0
158
0
n.a.
0
n.a.
0
n.a.
OPTIONS TRANSACTIONS4
25
26
27
28
29
30
31
32
33
By type of underlying security
U.S. Treasury bills
Coupon securities, by maturity
Five years or less
More than five years
Inflation-indexed
Federal agency
Discount notes
Coupon securities, by maturity
One year or less
More than one year, but less than
or equal to five years
More than five years
Mortgage-backed
0
0
0
0
0
0
0
0
0
0
0
0
1,397
5,601
0
1,490
3,565
0
1,608
4,256
0
2,206
4,571
0
1,538
4,195
0
1,073
3,835
0
1,337
4,275
0
2,765
4,951
0
1,872
5,405
0
2,043
3,977
0
2,264
3,808
0
1,021
4,329
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
776
0
0
856
0
0
686
n.a.
n.a.
1,141
n.a.
n.a.
731
n.a.
n.a.
511
0
386
0
n.a.
927
n.a.
n.a.
1,058
0
1,205
n.a.
n.a.
1,188
n.a.
n.a.
921
1. Transactions are market purchases and sales of securities as reported to the Federal
Reserve Bank of New York by the U.S. government securities dealers on its published list of
primary dealers. Monthly averages are based on the number of trading days in the month.
Transactions are assumed to be evenly distributed among the trading days of the report week.
Immediate, forward, and futures transactions are reported at principal value, which does not
include accrued interest; options transactions are reported at the face value of the underlying
securities.
Dealers report cumulative transactions for each week ending Wednesday.
2. Outright transactions include immediate and forward transactions. Immediate delivery
refers to purchases or sales of securities (other than mortgage-backed federal agency securities) for which delivery is scheduled in five business days or less and "when-issued"
securities that settle on the issue date of offering. Transactions for immediate delivery of mortgagebacked agency securities include purchases and sales for which delivery is scheduled in thirty business
days or less. Stripped securities arereportedat market value by maturity of coupon or corpus.
n.a.
n.a.
Forward transactions are agreements made in the over-the-counter market that specify
delayed delivery. Forward contracts for U.S. Treasury securities and federal agency debt
securities are included when the time to delivery is more than five business days. Forward
contracts for mortgage-backed agency securities are included when the time to delivery is
more than thirty business days.
3. Futures transactions are standardized agreements arranged on an exchange. All futures
transactions are included regardless of time to delivery.
4. Options transactions are purchases or sales of put and call options, whether arranged on
an organized exchange or in the over-the-counter market, and include options on futures
contracts on U.S. Treasury and federal agency securities.
NOTE, "n.a." indicates that data are not published because of insufficient activity.
Federal Finance
1.43
U.S. GOVERNMENT SECURITIES DEALERS
A29
Positions and Financing 1
Millions of dollars
2000
Feb.
2000, week ending
Mar.
Apr. 5
Apr.
Apr. 12
Apr. 19
Apr. 26
May 3
May 10
May 17
May 24
Positions 2
NET OUTRIGHT POSITIONS3
1
2
3
4
5
6
7
8
9
By type of security
U.S. Treasury bills
Coupon securities, by maturity
Five years or less
More than five years
Inflation-indexed
Federal agency
Discount notes
Coupon securities, by maturity
One year or less
More than one year, but less than
or equal to five years
More than five years
Mortgage-backed
2,930
8,065
6,568
16,864
16,392
6,150
-2,464
-6,953
-4,737
-8,719
-5,988
-40,347
-23,905
1,821
-51,585
-24,238
2,141
-42,019
-21,221
1,837
24,144
27,046
26,524
14,726
14,390
10,273
106
2,763
25,367
1,630
1,481
23,584
7,487
2,096
12,753
-37,515
-22,779
3,197
-28,507
-20,433
2,612
-28,803
-18,591
2,192
-20,890
-21,368
2,334
-27,548
-18,772
2,451
-30,888
-17,765
2,208
-27,331
-15,731
1,979
-39,815
-21,250
1,908
37,602
32,628
28,299
29,022
29,220
22,763
31,357
30,118
9,710
5,852
4,106
15,723
12,553
3,418
2,753
20,966
15,284
894
3,316
27,631
14,631
679
3,010
25,867
15,933
-583
2,659
26,812
15,774
972
3,710
26,682
14,911
14,759
1,497
3,802
29,546
2,555
3,306
29,580
NET FUTURES POSITIONS4
By type of deliverable
security
10 U.S. Treasury bills
Coupon securities, by maturity
11
Five years or less
12
More than five years
13 Inflation-indexed
Federal agency
14 Discount notes
Coupon securities, by maturity
15
One year or less
16
More than one year, but less than
or equal to five years
17
More than five years
18 Mortgage-backed
0
0
0
0
0
0
0
0
0
0
13,382
-7,040
0
13,480
-2,131
0
11,796
-5,602
0
12,895
-1,525
0
13,071
-1,769
0
13,724
-2,107
0
16,900
470
0
18,598
1,024
0
19,996
3,293
0
16,145
2,537
0
n.a.
14,668
-2,067
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
-11
0
0
-40
0
n.a.
-22
0
17
0
0
-105
0
n.a.
-59
0
0
-13
0
0
-145
0
0
-123
0
0
-125
0
n.a.
NET OPTIONS POSITIONS
By type of deliverable
security
19 U.S. Treasury bills
Coupon securities, by maturity
20
Five years or less
21
More than five years
22 Inflation-indexed
Federal agency
23 Discount notes
Coupon securities, by maturity
24
One year or less
25
More than one year, but less than
or equal to five years
26
More than five years
27 Mortgage-backed
0
0
0
0
0
0
0
0
0
0
0
-2,684
2,770
0
-101
5,265
0
74
6,471
0
-184
7,261
0
311
6,161
0
-208
6,728
0
172
7,002
0
302
4,645
0
818
3,685
0
-395
4,163
0
205
549
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
n.a.
102
324
80
91
1,261
139
70
52
n.a.
455
242
n.a.
1,091
273
184
1,299
374
182
1,102
n.a.
778
655
n.a.
n.a.
2,728
n.a.
n.a.
88
-769
n.a.
29
-316
Financing 5
Reverse repurchase agreements
28 Overnight and continuing
29 Term
301,114
711,031
289,942
818,513
298,607
792,459
299,001
729,113
283,522
775,840
312,370
796,484
292,747
820,733
310,680
844,198
297,306
884,511
328,312
718,663
295,751
768,550
Securities borrowed
30 Overnight and continuing
31 Term
261,280
98,511
261,482
103,451
280,029
112,178
271,340
105,653
268,638
111,331
278,064
111,587
289,386
116,685
297,888
114,967
297,278
114,545
316,172
101,483
307,579
103,676
1,632
n.a.
2,008
n.a.
1,890
n.a.
1,890
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
1,686
n.a.
1,810
n.a.
Repurchase
agreements
34 Overnight and continuing
35 Term
729,491
580,824
715,903
695,275
732,319
682,363
736,338
613,835
728,373
660,868
736,302
693,987
728,756
713,667
733,463
730,516
716,480
766,886
762,432
592,722
711,311
655,885
Securities loaned
36 Overnight and continuing
37 Term
10,660
6,087
8,550
7,671
7,750
7,738
7,554
6,762
7,456
6,300
8,093
7,263
7,796
9,595
7,830
9,053
7,676
9,923
8,546
8,810
8,773
8,977
Securities pledged
38 Overnight and continuing
39 Term
51,230
7,232
58,304
6,848
61,754
7,132
62,868
7,317
58,139
7,269
61,451
7,019
65,493
7,118
60,672
6,880
59,059
7,040
63,031
4,846
60,489
5,138
Collateralized
40 Total
16,629
15,816
22,002
23,853
24,565
23,185
19,188
18,054
21,471
8,955
18,053
Securities received as pledge
32 Overnight and continuing
33 Term
n.a.
n.a.
loans
1. Data for positions and financing are obtained from reports submitted to the Federal
Reserve Bank of New York by the U.S. government securities dealers on its published list of
primary dealers. Weekly figures are close-of-business Wednesday data. Positions for calendar
days of the report week are assumed to be constant. Monthly averages are based on the
number of calendar days in the month.
2. Securities positions are reported at market value.
3. Net outright positions include immediate and forward positions. Net immediate positions include securities purchased or sold (other than mortgage-backed agency securities) that
have been delivered or are scheduled to be delivered in five business days or less and
"when-issued" securities that settle on the issue date of offering. Net immediate positions for
mortgage-backed agency securities include securities purchased or sold that have been
delivered or are scheduled to be delivered in thirty business days or less.
Forward positions reflect agreements made in the over-the-counter market that specify
delayed delivery. Forward contracts for U.S. Treasury securities and federal agency debt
securities are included when the time to delivery is more than five business days. Forward
contracts for mortgage-backed agency securities are included when the time to delivery is
more than thirty business days.
4. Futures positions reflect standardized agreements arranged on an exchange. All futures
positions are included regardless of time to delivery.
5. Overnight financing refers to agreements made on one business day that mature on the
next business day; continuing contracts are agreements that remain in effect for more than one
business day but have no specific maturity and can be terminated without advance notice by
either party; term agreements have a fixed maturity of more than one business day. Financing
data are reported in terms of actual funds paid or received, including accrued interest.
NOTE, "n.a." indicates that data are not published because of insufficient activity.
A30
1.44
DomesticNonfinancialStatistics • August 2000
FEDERAL A N D FEDERALLY SPONSORED CREDIT AGENCIES
Debt Outstanding
Millions of dollars, end of period
1999
Agency
1
Federal and federally sponsored agencies
Federal agencies
Defense Department1
Export-Import Bank2'3
Federal Housing Administration4
Government National Mortgage Association certificates of
participation5
Postal Service6
7
8
Tennessee Valley Authority
United States Railway Association6
9
2
3
4
5
6
10
11
12
13
14
15
16
17
18
7
Federally sponsored agencies
Federal Home Loan Banks
Federal Home Loan Mortgage Corporation
Federal National Mortgage Association
Farm Credit Banks8
Student Loan Marketing Association 9
Financing Corporation10
Farm Credit Financial Assistance Corporation11
Resolution Funding Corporation12
1996
1997
1998
Nov.
Dec.
Jan.
Feb.
Mar.
n.a.
1,616,492
1,620,814
1,635,828
1,644,276
26,376
6
26,277
6
26,168
6
26,231
6
n.a.
n.a.
n.a.
n.a.
925,823
1,022,609
1,296,477
1,616,492
29,380
6
1,447
84
27,792
6
552
102
26,502
6
26,376
6
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
27,786
26,496
26,370
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
27,853
n.a.
2000
1999
205
28,218
6
n.a.
126
126
n.a.
n.a.
28,212
126
126
155
168
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
26,370
26,271
26,162
26,225
n.a.
n.a.
n.a.
n.a.
1,594,537
522,692
372,586
544,360
69,082
43,762
8,170
1,261
29,996
1,609,660
527,835
380,660
547,100
69,147
42,723
8,170
1,261
29,996
1,618,045
535,284
378,006
557,543
67,154
38,089
8,170
1,261
29,996
40,753
40,182
39,306
896,443
263,404
156,980
331,270
60,053
44,763
8,170
1,261
29,996
994,817
313,919
169,200
369,774
63,517
37,717
8,170
1,261
29,996
1,269,975
382,131
287,396
460,291
63,488
35,399
8,170
1,261
29,996
1,590,116
529,005
360,711
547,619
68,883
41,988
8,170
1,261
29,996
502,842
357,317
540,364
67,654
44,402
8,170
1,261
29,996
1,590,116
529,005
360,711
547,619
68,883
41,988
8,170
1,261
29,996
58,172
49,090
44,129
42,152
42,843
42,152
MEMO
19
Federal Financing Bank debt 13
20
21
22
23
24
Lending to federal and federally sponsored agencies
Export-Import Bank3
Postal Service6
Student Loan Marketing Association
Tennessee Valley Authority
United States Railway Association6
1,431
n.a.
n.a.
n.a.
n.a.
552
n.a.
n.a.
n.a.
n.a.
F
1
F
1
F
1
F
1
F
1
F
1
F
1
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
•
1
T
n.a.
I
T
6,515
14,016
19,651
6,350
13,152
19,804
1
I
1
i
I
i
1
T
u
25
26
27
Other lending
Farmers Home Administration
Rural Electrification Administration
Other
18,325
16,702
21,714
13,530
14,898
20,110
1. Consists of mortgages assumed by the Defense Department between 1957 and 1963
under family housing and homeowners assistance programs.
2. Includes participation certificates reclassified as debt beginning Oct. 1, 1976.
3. On-budget since Sept. 30, 1976.
4. Consists of debentures issued in payment of Federal Housing Administration insurance
claims. Once issued, these securities may be sold privately on the securities market.
5. Certificates of participation issued before fiscal year 1969 by the Government National
Mortgage Association acting as trustee for the Farmers Home Administration, the Department
of Health, Education, and Welfare, the Department of Housing and Urban Development, the
Small Business Administration, and the Veterans Administration.
6. Off-budget.
7. Includes outstanding noncontingent liabilities: notes, bonds, and debentures. Includes
Federal Agricultural Mortgage Corporation, therefore details do not sum to total. Some data
are estimated.
8. Excludes borrowing by the Farm Credit Financial Assistance Corporation, which is
shown on line 17.
9. Before late 1982, the association obtained financing through the Federal Financing Bank
(FFB). Borrowing excludes that obtained from the FFB, which is shown on line 22.
9,500
14,091
20,538
6,665
14,085
21,402
6,775
14,025
22,043
6,665
14,085
21,402
6,565
13,958
20,230
10. The Financing Corporation, established in August 1987 to recapitalize the Federal
Savings and Loan Insurance Corporation, undertook its first borrowing in October 1987.
11. The Farm Credit Financial Assistance Corporation, established in January 1988 to
provide assistance to the Farm Credit System, undertook its first borrowing in July 1988.
12. The Resolution Funding Corporation, established by the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989, undertook its first borrowing in October 1989.
13. The FFB, which began operations in 1974, is authorized to purchase or sell obligations
issued, sold, or guaranteed by other federal agencies. Because FFB incurs debt solely for the
purpose of lending to other agencies, its debt is not included in the main portion of the table to
avoid double counting.
14. Includes FFB purchases of agency assets and guaranteed loans; the latter are loans
guaranteed by numerous agencies, with the amounts guaranteed by any one agency generally
being small. The Farmers Home Administration entry consists exclusively of agency assets,
whereas the Rural Electrification Administration entry consists of both agency assets and
guaranteed loans.
Securities Markets and Corporate Finance
1.45
N E W SECURITY ISSUES
A31
Tax-Exempt State and Local Governments
Millions of dollars
2000
1999
Type of issue or issuer,
or use
1997
1998
1999
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
1 All issues, new and refunding 1
214,694
262,342
215,427
17,497
17,428
14,751
8,969
10,905
16,780
14,233
14,136
By type of issue
2 General obligation
3 Revenue
69,934
134,989
87,015
175,327
73,308
142,120
4,183
13,314
4,996
12,433
3,715
11,035
3,454
5,516
4,473
6,433
5,008
11,773
4,598
9,635
6,051
8,086
By type of issuer
4 State
5 Special district or statutory authority2
6 Municipality, county, or township
18,237
134,919
70,558
23,506
178,421
60,173
16,376
152,418
46,634
1,753
12,186
3,557
929
12,613
3,886
834
10,640
3,277
863
5,784
2,322
1,730
7,414
1,761
1,570
11,098
4,112
1,371
10,229
2,633
1,102
9,639
3,396
7 Issues for new capital
135,519
160,568
161,065
14,908
14,084
11,475
8,009
9,382
13,508
12,029
12,481
31,860
13,951
12,219
27,794
6,667
35,095
36,904
19,926
21,037
n.a.
8,594
42,450
36,563
17,394
15,098
n.a.
9,099
47,896
2,049
1,674
1,176
n.a.
726
4,509
2,732
892
1,893
n.a.
668
5,213
3,095
1,201
1,008
n.a.
707
3,141
2,189
1,064
588
n.a.
89
2,885
2,548
723
115
n.a.
647
2,804
3,436
2,723
1,086
n.a.
747
2,426
2,484
768
729
n.a.
762
3,903
3,662
1,778
537
n.a.
585
3,557
8
9
10
11
12
13
By use of proceeds
Education
Transportation
Utilities and conservation
Social welfare
Industrial aid
Other purposes
1. Par amounts of long-term issues based on date of sale.
2. Includes school districts.
1.46
N E W SECURITY ISSUES
SOURCE. Securities Data Company beginning January
Digest before then.
1990; Investment
Dealer's
U.S. Corporations
Millions of dollars
1999
Type of issue, offering,
or issuer
1997
1998
2000
1999
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
1 All issues 1
929,256
1,128,491
1,072,866
82,414
58,613
85,016
50,805
55,714
85,679
113,093 r
61,793
2 Bonds 2
811,376
1,001,736
941,298
75,807
47,103
61,033
42,477
44,220
63,391
96,148
40,941
By type of offering
3 Sold in the United States
4 Sold abroad
708,188
103,188
923,771
77,965
818,683
122,615
65,679
10,128
37,721
9,382
53,908
7,125
36,488
5,989
30,784
13,436
56,727
6,664
87,603
8,545
36,724
4,217
1,640
1,632
1,237
3,241
967
65
n.a.
n.a.
MEMO
5 Private placements, domestic
n.a.
n.a.
n.a.
By industry group
6 Nonfinancial
7 Financial
222,603
588,773
307,935
693,801
293,963
647,335
20,655
55,151
13,990
33,112
24,283
36,750
14,614
27,863
14,599
29,620
26,598
36,792
28,086
68,062
8,060
32,881
8 Stocks 3
117,880
126,755
131,568
6,607
11,510
23,983
8,328
11,494
22,288
16,945 r
20,852
By type of offering
9 Public
10 Private placement 4
117,880
55,450
126,755
78,850
131,568
86,300
6,607
7,192
11,510
7,192
23,983
7,192
8,328
7,192
11,494
n.a.
22,288
n.a.
16,945 r
n.a.
20,852
n.a.
By industry group
11 Nonfinancial
f2 Financial
60,386
57,494
74,113
52,642
110,284
21,284
5,647
960
10,961
549
22,611
1,372
7,450
878
9,247
2,247
21,796
492
15,679 r
1,266
16,593
4,259
1. Figures represent gross proceeds of issues maturing in more than one year; they are the
principal amount or number of units calculated by multiplying by the offering price. Figures
exclude secondary offerings, employee stock plans, investment companies other than closedend, intracorporate transactions, and Yankee bonds. Stock data include ownership securities
issued by limited partnerships.
2. Monthly data include 144(a) offerings.
3. Monthly data cover only public offerings.
4. Data are not available.
SOURCE. Securities Data Company and the Board of Governors of the Federal Reserve
System.
A32
1.47
DomesticNonfinancialStatistics • August 2000
Net Sales and Assets 1
O P E N - E N D INVESTMENT COMPANIES
Millions of dollars
1999
Item
1998
2000
1999
Nov.
Oct.
Dec.
Jan.
Feb.
Mar.
Apr/
May
1 Sales of own shares 2
1,461,430
1,791,894
140,738
155,490
185,898
226,251
237,861
269,118
202,248
172,628
2 Redemptions of own shares
3 Net sales 3
1,217,022
244,408
1,621,987
169,906
124,052
16,686
143,688
11,801
178,855
7,042
204,380
21,871
197,423
40,438
243,194
25,924
176,671
25,577
163,034
9,595
4,173,531
5,233,191
4,705,746
4,874,733
5,233,191
5,114,482
5,375,874
5,606,254
5,391,187
5,232,267
191,393
3,982,138
219,189
5,014,002
225,762
4,479,985
214,751
4,659,982
219,189
5,014,002
222,729
4,891,753
231,480
5,144,394
221,623
5,384,630
254,819
5,136,368
260,543
4,971,724
4 Assets
4
5 Cash5
6 Other
1. Data include stock, hybrid, and bond mutual funds and exclude money market mutual
funds.
2. Excludes reinvestment of net income dividends and capital gains distributions and share
issue of conversions from one fund to another in the same group.
3. Excludes sales and redemptions resulting from transfers of shares into or out of money
market mutual funds within the same fund family.
1.48
4. Market value at end of period, less current liabilities.
5. Includes all U.S. Treasury securities and other short-term debt securities.
SOURCE. Investment Company Institute. Data based on reports of membership, which
comprises substantially all open-end investment companies registered with the Securities and
Exchange Commission. Data reflect underwritings of newly formed companies after their
initial offering of securities.
CORPORATE PROFITS A N D THEIR DISTRIBUTION
Billions of dollars; quarterly data at seasonally adjusted annual rates
1998
Account
1 Profits with inventory valuation and
capital consumption adjustment
2 Profits before taxes
3 Profits-tax liability
4 Profits after taxes
5 Dividends
6 Undistributed profits
7 Inventory valuation
8 Capital consumption adjustment
1997
1998
1999
2000
1999
Q2
Q3
Q4
Ql
Q2
Q3
Q4
Ql
838.5
795.9
238.3
557.6
333.7
223.9
848.4
781.9
240.2
541.7
348.6
193.1
892.7
848.5
259.4
589.1
364.7
224.4
849.4
792.0
241.1
550.9
347.3
203.6
846.8
780.1
244.3
535.8
348.4
187.4
839.0
766.7
235.6
531.0
352.2
178.8
886.9
818.1
248.0
570.1
356.4
213.7
880.5
835.8
254.4
581.4
361.5
219.9
884.1
853.8
259.4
594.3
367.3
227.0
919.4
886.3
275.7
610.6
373.5
237.1
953.9
923.7
288.7
635.0
380.0
255.0
7.4
35.3
20.9
45.6
-13.0
57.2
13.6
43.8
19.8
46.9
20.8
51.6
13.3
55.5
-13.6
58.2
-26.7
57.0
-24.9
58.0
-26.7
56.9
SOURCE. U.S. Department of Commerce, Survey of Current Business.
1.51
DOMESTIC FINANCE COMPANIES
Assets and Liabilities 1
Billions of dollars, end of period; not seasonally adjusted
1998
Account
1997
1999
2000
1999r
1998
Q3
Q4
Ql
Q2
Q3
Q4
Ql
ASSETS
1 Accounts receivable, gross 2
2
Consumer
3
Business
4
Real estate
663.3
256.8
318.5
87.9
711.7
261.8
347.5
102.3
811.5
279.8
405.2
126.5
687.6
254.0
335.1
98.5
711.7
261.8
347.5
102.3
733.8
261.7
362.8
109.2
756.5
269.2
373.7
113.5
776.3
271.0
383.0
122.3
811.5
279.8
405.2
126.5
848.8
285.5
434.6
128.8
52.7
13.0
56.3
13.8
53.5
13.5
52.4
13.2
56.3
13.8
52.9
13.4
53.4
13.4
54.0
13.6
53.5
13.5
53.9
14.0
7 Accounts receivable, net
8 All other
597.6
312.4
641.6
337.9
744.6
406.3
622.0
313.7
641.6
337.9
667.6
363.3
689.7
373.2
708.6
368.5
744.6
406.3
780.9
412.5
9 Total assets
910.0
979.5
1,150.9
935.7
979.5
1,030.8
1,062.9
1,077.2
1,150.9
1,193.4
24.1
201.5
26.3
231.5
35.1
227.9
24.9
226.9
26.3
231.5
24.8
222.9
25.1
231.0
27.0
205.3
35.1
227.9
30.7
229.7
64.7
328.8
189.6
101.3
61.8
339.7
203.2
117.0
123.8
397.0
222.7
144.5
58.3
337.6
185.4
103.6
61.8
339.7
203.2
117.0
64.6
366.7
220.3
131.5
65.4
383.1
226.1
132.2
84.5
396.2
216.0
148.2
123.8
397.0
222.7
144.5
145.2
410.0
241.6
136.2
910.0
979.5
1,150.9
936.6
979.5
1,030.8
1,062.9
1,077.2
1,150.9
1,193.4
5 LESS: Reserves for unearned income
6
Reserves for losses
LIABILITIES AND CAPITAL
10 Bank loans
11 Commercial paper
12
13
14
15
Debt
Owed to parent
Not elsewhere classified
All other liabilities
Capital, surplus, and undivided profits
16 Total liabilities and capital
1. Includes finance company subsidiaries of bank holding companies but not of retailers
and banks. Data are amounts carried on the balance sheets of finance companies; securitized
pools are not shown, as they are not on the books.
2. Before deduction for unearned income and losses. Excludes pools of securitized assets,
Securities Market and Corporate Finance
1.52
DOMESTIC FINANCE COMPANIES
A33
Owned and Managed Receivables 1
Billions of dollars, amounts outstanding
1999
Type of credit
1997
1998
2000
1999
Nov.
Dec.
Jan.
Feb.
Mar.
Apr?
Seasonally adjusted
1 Total
810.5
875.8
993.9
984.8
993.9
1,022.4
1,032.2
l,054.1 r
1,073.2
2
3
4
327.9
121.1
361.5
352.8
131.4
391.6
385.3
154.7
453.9
385.2
152.7
446.9
385.3
154.7
453.9
391.7
159.1
471.6
395.5
162.3
474.4
396.7 r
167.9
489.4
398.2
173.1
501.9
Consumer
Real estate
Business .
Not seasonally adjusted
5 Total
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
Consumer
Motor vehicles loans
Motor vehicle leases
Revolving 2
Other3
Securitized assets 4
Motor vehicle loans
Motor vehicle leases
Revolving
Other
Real estate
One- to four-family
Other
Securitized real estate assets 4
One- to four-family
Other
Business
Motor vehicles
Retail loans
Wholesale loans 5
Leases
Equipment
Loans
Leases
Other business receivables 6
Securitized assets 4
Motor vehicles
Retail loans
Wholesale loans
Leases
Equipment
Loans
Leases
Other business receivables 6
818.1
884.0
1,003.2
986.3
1,003.2
1,022.4
1,031.9
l,057.0 r
1,073.4
330.9
87.0
96.8
38.6
34.4
356.1
103.1
93.3
32.3
33.1
388.8
114.7
98.3
33.8
33.1
386.5
111.6
99.1
30.5
33.2
388.8
114.7
98.3
33.8
33.1
391.1
117.6
99.3
34.4
33.0
392.3
121.3
100.7
32.9
32.7
392.8 r
121.1
101.7
31.5
31.l r
394.6
120.9
102.8
31.9
31.4
44.3
10.8
.0
19.0
121.1
59.0
28.9
54.8
12.7
8.7
18.1
131.4
75.7
26.6
71.1
9.7
10.5
17.7
154.7
88.3
38.3
74.6
10.0
10.2
17.4
152.7
89.4
37.1
71.1
9.7
10.5
17.7
154.7
88.3
38.3
69.6
9.5
10.4
17.4
159.1
91.1
38.6
67.8
9.2
10.4
17.3
162.3
91.7
38.4
71.2
8.8
10.3
17.1
167.9
90.4
38.4
72.1
8.5
10.1
16.8
173.1
93.6
39.0
33.0
.2
366.1
63.5
25.6
27.7
10.2
203.9
51.5
152.3
51.1
29.0
.1
396.5
79.6
28.1
32.8
18.7
198.0
50.4
147.6
69.9
28.0
.2
459.6
87.8
33.2
34.7
19.9
221.9
52.2
169.7
95.5
25.9
.2
447.1
85.4
33.7
32.6
19.2
211.2
49.1
162.1
98.2
28.0
.2
459.6
87.8
33.2
34.7
19.9
221.9
52.2
169.7
95.5
29.2
.2
472.2
87.9
33.3
34.6
20.1
222.3
51.9
170.4
99.6
32.0
.2
477.4
89.6
33.7
35.8
20.1
225.1
52.8
172.3
101.4
38.9
.2
496.3
90.2
32.3
37.9
19.9
238.0
54.9
183.1
106.4
40.2
0.2
505.7
93.6
32.7
38.9
22.0
243.1
55.6
187.5
107.0
33.0
2.4
30.5
.0
10.7
4.2
6.5
4.0
29.2
2.6
24.7
1.9
13.0
6.6
6.4
6.8
31.5
2.9
26.4
2.1
14.6
7.9
6.7
8.4
30.6
3.0
25.6
2.0
14.0
7.4
6.6
7.7
31.5
2.9
26.4
2.1
14.6
7.9
6.7
8.4
31.5
2.9
26.5
2.1
22.8
16.1
6.7
8.1
31.0
2.8
26.1
2.1
22.5
15.9
6.6
7.7
31.5
3.2
25.9
2.4
22.0
15.4
6.5
8.3
32.3
3.1
26.8
2.4
21.7
15.2
6.5
8.0
NOTE. This table has been revised to incorporate several changes resulting from the
benchmarking of finance company receivables to the June 1996 Survey of Finance Companies. In that benchmark survey, and in the monthly surveys that have followed, more detailed
breakdowns have been obtained for some components. In addition, previously unavailable
data on securitized real estate loans are now included in this table. The new information has
resulted in some reclassification of receivables among the three major categories (consumer,
real estate, and business) and in discontinuities in some component series between May and
June 1996.
Includes finance company subsidiaries of bank holding companies but not of retailers and
banks. Data in this table also appear in the Board's G.20 (422) monthly statistical release. For
ordering address, see inside front cover.
1. Owned receivables are those carried on the balance sheet of the institution. Managed
receivables are outstanding balances of pools upon which securities have been issued; these
balances are no longer carried on the balance sheets of the loan originator. Data are shown
before deductions for unearned income and losses. Components may not sum to totals
because of rounding.
2. Excludes revolving credit reported as held by depository institutions that are subsidiaries of finance companies.
3. Includes personal cash loans, mobile home loans, and loans to purchase other types of
consumer goods such as appliances, apparel, boats, and recreation vehicles.
4. Outstanding balances of pools upon which securities have been issued; these balances
are no longer carried on the balance sheets of the loan originator.
5. Credit arising from transactions between manufacturers and dealers, that is, floor plan
financing.
6. Includes loans on commercial accounts receivable, factored commercial accounts, and
receivable dealer capital; small loans used primarily for business or farm purposes; and
wholesale and lease paper for mobile homes, campers, and travel trailers.
A34
1.53
DomesticNonfinancialStatistics • August 2000
MORTGAGE MARKETS
Mortgages on N e w Homes
Millions of dollars except as noted
2000
1999
Item
1997
1999
1998
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
Terms and yields in primary and secondary markets
PRIMARY MARKETS
1
1
2
3
4
5
Terms
Purchase price (thousands of dollars)
Amount of loan (thousands of dollars)
Loan-to-price ratio (percent)
Maturity (years)
Fees and charges (percent of loan amount) 2
Yield (percent per year)
6 Contract rate1
7 Effective rate1'3
8 Contract rate (HUD series) 4
180.1
140.3
80.4
28.2
1.02
195.2
151.1
80.0
28.4
.89
210.7
161.7
78.7
28.8
.77
220.8
167.0
77.4
29.0
.73
216.3
167.2
78.6
29.0
.71
223.7
169.9
77.9
29.1
.75
216.9
165.6
78.4
29.1
.71
226.0
170.7
77.7
29.0
.68
224.2
170.2
77.9
29.1
.68
232.2
176.3
78.0
29.2
.71
7.57
7.73
7.76
6.95
7.08
7.00
6.94
7.06
7.45
7.13
7.24
7.79
7.18
7.28
7.95
7.34
7.45
8.21
7.43
7.54
8.20
7.49
7.60
8.19
7.52
7.63
8.29
7.44
7.55
8.26
7.89
7.26
7.04
6.43
7.74
7.03
8.06
7.37
8.55
7.58
8.56
7.84
8.53
7.96
8.35
7.79
8.33
7.64
8.58
8.06
SECONDARY MARKETS
Yield (percent per year)
9 FHA mortgages (Section 203) 5
10 GNMA securities 6
Activity in secondary markets
FEDERAL NATIONAL MORTGAGE ASSOCIATION
Mortgage holdings (end of period)
11 Total
12
FHA/VA insured
13
Conventional
316,678
31,925
284,753
414,515
33,770
380,745
523,941
55,318
468,623
518,337
52,632
465,705
523,941
55,318
468,623
527,977
57,369
470,608
535,096
58,294
476,802
538,751
58,451
480,300
539,181
58,899
480,282
545,803
59,140
486,663
14 Mortgage transactions purchased (during period)
70,465
188,448
195,210
14,683
11,416
9,035
11,484
8,801
6,257
12,872
Mortgage commitments
15 Issued7
16 To sell 8
69,965
1,298
193,795
1,880
187,948
5,900
12,050
381
9,931
1,592
9,130
1,287
9,811
612
10,051
1,954
12,524
1,340
10,450
1,594
Mortgage holdings (end of period)8
17 Total
18
FHA/VA insured
19
Conventional
164,421
177
164,244
255,010
785
254,225
324,443
1,836
322,607
323,027
1,848
321,179
324,443
1,836
322,607
325,914
1,806
324,108
328,598
1,719
326,879
336,338
2,521
333,817
339,207
1,987
337,220
347,370
3,116
344,254
Mortgage transactions
20 Purchases
21 Sales
117,401
114,258
267,402
250,565
239,793
233,031
11,869
11,129
9,335
8,589
12,942
12,764
6,747
6,424
9,323
8,569
8,393
8,077
15,741
15,261
120,089
281,899
228,432
10,501
11,587
8,341
7,156
10,122
8,750
13,807
(during
period)
FEDERAL HOME LOAN MORTGAGE CORPORATION
(during
period)
22 Mortgage commitments contracted (during period) 9
1. Weighted averages based on sample surveys of mortgages originated by major institutional lender groups for purchase of newly built homes; compiled by the Federal Housing
Finance Board in cooperation with the Federal Deposit Insurance Corporation.
2. Includes all fees, commissions, discounts, and "points" paid (by the borrower or the
seller) to obtain a loan.
3. Average effective interest rate on loans closed for purchase of newly built homes,
assuming prepayment at the end of ten years.
4. Average contract rate on new commitments for conventional first mortgages; from U.S.
Department of Housing and Urban Development (HUD). Based on transactions on the first
day of the subsequent month.
5. Average gross yield on thirty-year, minimum-downpayment first mortgages insured
by the Federal Housing Administration (FHA) for immediate delivery in the private
secondary market. Based on transactions on first day of subsequent month.
6. Average net yields to investors on fully modified pass-through securities backed by
mortgages and guaranteed by the Government National Mortgage Association (GNMA),
assuming prepayment in twelve years on pools of thirty-year mortgages insured by the
Federal Housing Administration or guaranteed by the Department of Veterans Affairs.
7. Does not include standby commitments issued, but includes standby commitments
converted.
8. Includes participation loans as well as whole loans.
9. Includes conventional and government-underwritten loans. The Federal Home Loan
Mortgage Corporation's mortgage commitments and mortgage transactions include activity
under mortgage securities swap programs, whereas the corresponding data for FNMA
exclude swap activity.
Real Estate
1.54
A3 5
MORTGAGE D E B T OUTSTANDING 1
Millions of dollars, end of period
1999
Type of holder and property
1996
1997
Q2
Ql
1 All holders
2
3
4
5
By type of property
One- to four-family residences
Multifamily residences
Nonfarm, nonresidential
Farm
By type of holder
6 Major financial institutions
7
Commercial banks2
One- to four-family
8
9
Multifamily
Nonfarm, nonresidential
10
11
Farm
12
Savings institutions3
13
One- to four-family
14
Multifamily
Nonfarm, nonresidential
15
16
Farm
Life insurance companies
17
18
One- to four-family
19
Multifamily
Nonfarm, nonresidential
20
21
Farm
22 Federal and related agencies
Government National Mortgage Association
23
24
One- to four-family
Multifamily
25
26
Farmers Home Administration4
27
One- to four-family
28
Multifamily
29
Nonfarm, nonresidential
30
Farm
Federal Housing and Veterans' Administrations
31
32
One- to four-family
33
Multifamily
34
Resolution Trust Corporation
35
One- to four-family
36
Multifamily
37
Nonfarm, nonresidential
Farm
38
39
Federal Deposit Insurance Corporation
40
One- to four-family
41
Multifamily
42
Nonfarm, nonresidential
Farm
43
44
Federal National Mortgage Association
45
One- to four-family
Multifamily
46
47
Federal Land Banks
48
One- to four-family
49
Farm
50
Federal Home Loan Mortgage Corporation
51
One- to four-family
52
Multifamily
53 Mortgage pools or trusts5
54
Government National Mortgage Association
55
One- to four-family
Multifamily
56
57
Federal Home Loan Mortgage Corporation
58
One- to four-family
59
Multifamily
Federal National Mortgage Association
60
61
One- to four-family
Multifamily
62
63
Farmers Home Administration4
64
One- to four-family
Multifamily
65
Nonfarm, nonresidential
66
67
Farm
Private mortgage conduits
68
69
One- to four-family 6
Multifamily
70
71
Nonfarm, nonresidential
Farm
72
73 Individuals and others7
One- to four-family
74
Multifamily
75
Nonfarm, nonresidential
76
Farm
77
4,877,536
r
5,211,286
r
5,736,638
r
5,876,132
r
6,029,340
Q4
Q3
r
6,238,187
r
6,387,651
Ql
r
6,503,518
3,718,723 r
289,186 r
782,493 r
87,134
3,970,848'
302,517'
847,623'
90,299
4,355,376'
330,551'
954,205'
96,506
4,447,543'
341,889'
989,302'
97,398'
4,561,061'
349,310'
1,019,331'
99,638'
4,692,093'
359,904'
1,084,794'
101,396'
4,788,204'
373,514'
1,122,968'
102,965'
4,862,061
382,602
1,154,354
104,501
1,981,886'
1,145,389
677,603
45,451
397,452
24,883
628,335
513,712
61,570
52,723
331
208,162'
6,977
30,750
160,315'
10,120
2,083,981'
1,245,315
745,510
49,670
423,148
26,986
631,826'
520,782'
59,540'
51,150'
354
206,840'
7,187
30,402
158,779'
10,472
2,194,813
1,337,217
797,492'
54,116'
456,574'
29,035
643,957
533,918'
56,821'
52,801'
417
213,640
6,590
31,522
164,004
11,524
2,202,218'
1,336,733
782,446'
58,036'
466,738'
29,513
646,510
534,898'
56,759'
54,417'
435
218,975'
6,953'
31,515'
168,795'
11,712'
2,242,431'
1,361,365
790,372'
60,529'
479,929'
30,536
656,518
544,962'
55,016'
56,096'
443
224,548'
7,292'
31,800'
173,495'
11,961'
2,321,356'
1,418,819
827,291'
63,964'
496,246'
31,320
676,346
560,622'
57,282'
57,983'
459
226,190'
7,432'
31,998'
174,571'
12,189'
2,393,684'
1,495,717
879,676'
67,591'
516,611'
31,839
668,634
549,072'
59,138'
59,948'
475
229,333'
5,935'
32,592'
177,817'
12,989'
2,460,338
1,547,038
904,710
72,431
537,224
32,673
680,745
560,046
57,759
62,447
493
232,555
6,137
32,983
179,949
13,486
295,192
2
2
0
41,596
17,303
11,685
6,841
5,768
6,244
3,524
2,719
0
0
0
0
0
2,431
365
413
1,653
0
168,813
155,008
13,805
29,602
1,742
27,860
46,504
41,758
4,746
286,167
8
8
0
41,195
17,253
11,720
7,370
4,852
3,821
1,767
2,054
0
0
0
0
0
724
109
123
492
0
161,308
149,831
11,477
30,657
1,804
28,853
48,454
42,629
5,825
292,636
7
7
0
40,851
16,895
11,739
7,705
4,513
3,674
1,849
1,825
0
0
0
0
0
361
54
61
245
0
157,675
147,594
10,081
32,983
1,941
31,042
57,085
49,106
7,979
288,176
6
6
0
40,691
16,777
11,731
7,769
4,413
3,538
1,713
1,825
0
0
0
0
0
315
47
54
214
0
157,185
147,063
10,122
33,128
1,949
31,179
53,313
44,140
9,173
288,038
8
8
0
40,766
16,653
11,735
7,943
4,435
3,490
1,623
1,867
0
0
0
0
0
189
28
32
129
0
155,637
145,033
10,604
33,666
1,981
31,685
54,282
43,574
10,708
320,850'
8
8
0
73,705
16,583
11,745
41,068
4,308
3,889
2,013
1,876
0
0
0
0
0
163
24
28
111
0
153,172'
142,982
10,190'
34,218
2,013
32,205
55,695
44,010
11,685
320,105'
7
7
0
73,871
16,506
11,741
41,355
4,268
3,712'
1,851'
1,861'
0
0
0
0
0
152
23
26
103
0
151,500'
141,195
10,305'
34,187'
2,012'
32,175'
56,676
44,321
12,355
318,240
7
7
0
72,899
16,456
11,732
40,509
4,202
3,773
1,826
1,947
0
0
0
0
0
98
15
17
67
0
150,312
139,986
10,326
34,142
2,009
32,133
57,009
43,384
13,625
2,040,848'
506,246'
494,064'
12,182
554,260
551,513
2,747
650,780
633,210
17,570
3
0
0
0
3
329,559'
258,800'
16,369'
54,390'
0
2,239,350'
536,879
523,225
13,654
579,385
576,846
2,539
709,582
687,981
21,601
2
0
0
0
2
413,502'
316,400'
21,591'
75,511'
0
2,589,764'
537,446
522,498
14,948
646,459
643,465
2,994
834,518
804,205
30,313
1
0
0
0
1
571,340'
412,700'
34,323'
124,317'
0
2,715,196'
543,280
527,886
15,395
687,179
684,240
2,939
881,815
849,513
32,302
1
0
0
0
1
602,921'
430,653
37,736'
134,532'
0
2,810,119
553,196
537,287
15,909
718,085
714,844
3,241
911,435
877,863
33,572
1
0
0
0
1
627,402'
447,938
39,435'
140,029'
0
2,891,187'
569,038
552,670
16,368
738,581
735,088
3,493
938,484
903,531
34,953
0
0
0
0
0
645,084'
455,276
40,936'
148,873'
0
2,954,836'
582,307'
565,233'
17,074
749,081
744,619
4,462
960,883
924,941
35,942
0
0
0
0
0
662,565'
462,600
42,628'
157,337'
0
3,000,462
589,385
571,699
17,686
757,106
752,607
4,499
975,815
938,898
36,917
0
0
0
0
0
678,156
471,390
43,835
162,930
0
601,788'
379,516'
72,320'
131,173'
18,779
659,425'
417,063'
73,829'
148,559'
19,974
670,542'
419,258'
74,302'
156,836'
20,145'
688,753'
431,603'
74,863'
161,711'
20,577'
704,794'
442,550'
75,386'
165,943'
20,916'
719,026'
450,213'
77,799'
169,796'
21,218'
724,478
452,891
78,846
171,228
21,513
559,609
363,143
69,179
109,119
18,169
1. Multifamily debt refers to loans on structures of five or more units.
2. Includes loans held by nondeposit trust companies but not loans held by bank trust
departments.
3. Includes savings banks and savings and loan associations.
4. FmHA-guaranteed securities sold to the Federal Financing Bank were reallocated from
FmHA mortgage pools to FmHA mortgage holdings in 1986:Q4 because of accounting
changes by the Farmers Home Administration.
5. Outstanding principal balances of mortgage-backed securities insured or guaranteed by
the agency indicated.
2000
1998
6. Includes securitized home equity loans.
7. Other holders include mortgage companies, real estate investment trusts, state and local
credit agencies, state and local retirement funds, noninsured pension funds, credit unions, and
finance companies.
SOURCE. Based on data from various institutional and government sources. Separation of
nonfarm mortgage debt by type of property, if not reported directly, and interpolations and
extrapolations, when required for some quarters, are estimated in part by the Federal Reserve.
Line 69 from Inside Mortgage Securities and other sources.
A36
1.55
DomesticNonfinancialStatistics • August 2000
CONSUMER CREDIT 1
Millions of dollars, amounts outstanding, end of period
2000
1999
Holder and type of credit
1997
1998
1999
Dec.
Nov.
Jan.
Feb.
Mar.
Apr.P
Seasonally adjusted
1 Total
2 Revolving
3 Nonrevolving 2
1,234,461
1,301,023
1,393,657
1,382,727
1,393,657
1,409,387
1,418,756
1,429,431
1,438,201
531,163
703,297
560,504
740,519
595,610
798,047
588,972
793,755
595,610
798,047
603,782
805,605
608,523
810,233
615,510
813,921
622,005
816,197
Not seasonally adjusted
1,264,103
1,331,742
1,426,151
1,389,747
1,426,151
1,419,258
1,413,585
1,416,228
1,425,998
By major holder
Commercial banks
Finance companies
Credit unions
Savings institutions
Nonfinancial business
Pools of securitized assets 3
512,563
160,022
152,362
47,172
78,927
313,057
508,932
168,491
155,406
51,611
74,877
372,425
499,758
181,573
167,921
61,527
80,311
435,061
480,763
175,296
165,951
61,035
70,286
436,416
499,758
181,573
167,921
61,527
80,311
435,061
498,589
184,887
168,109
60,674
76,048
430,951
499,148
186,896
168,209
59,821
73,509
426,002
497,120
183,705
169,487
58,968
72,908
434,040
502,679
184,050
171,257
59,472
72,979
435,561
By major type of credit4
11 Revolving
12
Commercial banks
13
Finance companies
14
Credit unions
Savings institutions
15
16
Nonfinancial business
17
Pools of securitized assets 3
555,858
219,826
38,608
19,552
11,441
44,966
221,465
586,528
210,346
32,309
19,930
12,450
39,166
272,327
623,245
189,352
33,814
20,641
15,838
42,783
320,817
592,022
172,345
30,512
19,582
15,046
36,002
318,535
623,245
189,352
33,814
20,641
15,838
42,783
320,817
614,528
185,451
34,352
20,175
15,551
39,746
319,253
609,387
186,379
32,885
19,941
15,263
37,918
317,001
609,086
184,901
31,456
19,764
14,975
37,430
320,560
615,138
188,691
31,928
19,929
15,291
37,418
321,881
18 Nonrevolving
19
Commercial banks
20
Finance companies
21
Credit unions
22
Savings institutions
Nonfinancial business
23
24
Pools of securitized assets 3
708,245
292,737
121,414
132,810
35,731
33,961
91,592
745,214
298,586
136,182
135,476
39,161
35,711
100,098
802,906
310,406
147,759
147,280
45,689
37,528
114,244
797,725
308,418
144,784
146,369
45,989
34,284
117,881
802,906
310,406
147,759
147,280
45,689
37,528
114,244
804,730
313,138
150,535
147,934
45,123
36,302
111,698
804,198
312,769
154,011
148,268
44,558
35,591
109,001
807,142
312,219
152,249
149,723
43,993
35,478
113,480
810,860
313,988
152,122
151,328
44,181
35,561
113,680
4 Total
5
6
7
8
9
10
1. The Board's series on amounts of credit covers most short- and intermediate-term credit
extended to individuals, excluding loans secured by real estate. Data in this table also appear
in the Board's G.19 (421) monthly statistical release. For ordering address, see inside front
cover.
2. Comprises motor vehicle loans, mobile home loans, and all other loans that are not
included in revolving credit, such as loans for education, boats, trailers, or vacations. These
loans may be secured or unsecured.
1.56
3. Outstanding balances of pools upon which securities have been issued; these balances
are no longer carried on the balance sheets of the loan originator.
4. Totals include estimates for certain holders for which only consumer credit totals are
available.
TERMS OF CONSUMER CREDIT 1
Percent per year except as noted
1999
Item
1997
1998
2000
1999
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
INTEREST RATES
Commercial banks2
1 48-month new car
2 24-month personal
9.02
13.90
8.72
13.74
8.44
13.39
n.a.
n.a.
8.66
13.52
n.a.
n.a.
n.a.
n.a.
8.88
13.76
n.a.
n.a.
n.a.
n.a.
Credit card plan
3 All accounts
4 Accounts assessed interest
15.77
15.57
15.71
15.59
15.21
14.81
n.a.
n.a.
15.13
14.77
n.a.
n.a.
n.a.
n.a.
15.47
14.32
n.a.
n.a.
n.a.
n.a.
Auto finance companies
5 New car
6 Used car
7.12
13.27
6.30
12.64
6.66
12.60
7.07
13.28
7.44
13.27
7.32
13.28
7.18
12.95
7.34
13.27
6.76
13.45
6.38
13.52
54.1
51.0
52.1
53.5
52.7
55.9
53.2
55.8
53.9
55.8
53.4
55.6
52.9
57.0
52.7
57.1
53.1
57.1
53.8
57.1
92
99
92
99
92
99
92
100
91
99
91
99
91
98
92
98
93
99
93
98
18,077
12,281
19,083
12,691
19,880
13,642
20,335
13,613
20,517
13,777
20,699
13,970
20,503
13,809
20,206
13,697
20,395
13,666
20,542
13,871
OTHER TERMS3
Maturity (months)
7 New car
8 Used car
Loan-to-value
9 New car
10 Used car
ratio
Amount financed (dollars)
11 New car
12 Used car
1. The Board's series on amounts of credit covers most short- and intermediate-term credit
extended to individuals. Data in this table also appear in the Board's G.19 (421) monthly
statistical release. For ordering address, see inside front cover.
2. Data are available for only the second month of each quarter,
3. At auto finance companies,
Flow of Funds
1.57
A37
FUNDS RAISED IN U.S. CREDIT MARKETS 1
Billions of dollars; quarterly data at seasonally adjusted annual rates
1998
Transaction category or sector
2000
1999
1994
Q3
Q4
Q1
Q2
Q3
Q4
Ql
Nonfinancial sectors
1 Total net borrowing by domestic nonfinancial sectors . . .
568.0
712.0
732.5
805.5
1,038.1
909.0
1,087.1
1,287.7
889.1
1,180.9
1,123.7
956.6
By sector and instrument
2 Federal government
Treasury securities
4
Budget agency securities and mortgages
155.8
155.7
.2
144.4
142.9
1.5
145.0
146.6
-1.6
23.1
23.2
-.1
-52.6
-54.6
2.0
-113.5
-113.1
-.4
-54.1
-66.3
12.2
-75.2
-73.7
-1.5
-112.2
-112.8
.6
-83.1
-83.2
.0
-14.3
-14.3
.0
-204.0
-201.9
-2.1
5 Nonfederal
412.2
567.6
587.5
782.4
1,090.7
1,022.5
1,141.3
1,363.0
1,001.3
1,264.0
1,138.0
1,160.6
6
7
8
9
10
11
P
n
14
15
16
By instrument
Commercial paper
Municipal securities and loans
Corporate bonds
Bank loans n.e.c
Other loans and advances
Mortgages
Home
Multifamily residential
Commercial
Farm
Consumer credit
21.4
-35.9
23.3
75.2
34.0
169.3
183.4
-3.7
-12.7
2.2
124.9
18.1
-48.2
91.1
103.7
67.2
196.7
180.4
5.9
8.9
1.6
138.9
-.9
2.6
116.3
70.5
33.5
276.9
242.2
9.5
22.7
2.6
88.8
13.7
71.4
150.5
106.5
69.1
318.7
251.9
8.4
55.2
3.2
52.5
24.4
96.8
218.7
108.2
74.3
500.6
383.3
18.8
92.3
6.2
67.6
85.6
82.9
108.0
107.8
77.7
480.9
389.8
11.1
74.6
5.5
79.6
-43.0
89.6
193.2
120.9
102.5
608.1
441.3
26.3
131.9
8.6
69.9
58.3
100.7
274.0
70.0
153.9
575.4
413.9
35.3
122.6
3.6
130.5
-2.6
48.0
287.6
22.2
-14.5
599.2
428.1
33.4
128.7
9.0
61.4
49.8
77.0
202.8
112.8
79.0
666.4
491.3
45.9
122.1
7.0
76.2
44.0
47.0
155.2
125.8
56.2
600.4
398.0
48.1
151.8
2.5
109.5
36.4
19.3
189.0
104.5
172.0
496.4
338.0
33.8
120.7
3.9
143.1
17
18
IP
7.0
71
22
By borrowing sector
Household
Nonfinancial business
Corporate
Nonfarm noncorporate
Farm
State and local government
313.6
144.8
137.2
3.3
4.4
-46.2
348.5
270.6
237.1
30.6
2.9
-51.5
347.3
247.0
158.4
83.8
4.8
-6.8
332.9
393.4
272.3
115.0
6.2
56.1
476.9
533.5
416.0
109.8
7.7
80.3
477.7
474.7
358.4
109.0
7.3
70.0
530.4
535.8
413.4
114.8
7.5
75.1
543.7
731.8
628.4
96.8
6.6
87.4
511.6
454.0
355.2
99.8
-1.0
35.7
600.9
606.2
470.9
125.7
9.5
57.0
515.5
591.5
463.6
122.0
5.9
31.0
502.5
643.5
518.8
111.0
13.8
14.6
73 Foreign net borrowing in United States
74
Commercial paper
75
Bonds
76
Bank loans n.e.c
Other loans and advances
27
-13.9
-26.1
12.2
1.4
-1.4
71.1
13.5
49.7
8.5
-.5
77.2
11.3
55.8
9.1
1.0
57.6
3.7
47.2
8.5
-1.8
33.6
7.8
25.1
6.7
-6.0
-19.6
6.2
-27.2
3.6
-2.2
-38.9
-4.7
-34.2
9.8
-9.7
17.0
18.0
.9
.9
-2.8
-36.8
-27.5
-12.6
5.6
-2.3
62.2
41.1
29.4
-6.6
-1.6
15.6
33.6
-17.2
2.3
-3.0
114.2
56.8
39.1
15.4
2.9
28 Total domestic plus foreign
554.1
783.1
809.7
863.1
1,071.6
889.4
1,048.3
1,304.7
852.3
1,243.1
1,139.3
1,070.8
Financial sectors
29 Total net borrowing by financial sectors
468.4
453.9
545.8
653.7
1,073.9
1,067.9
1,296.9
1,199.2
1,016.1
1,075.2
1,061.2
596.0
By instrument
30 Federal government-related
31
Government-sponsored enterprise securities
32
Mortgage pool securities
Loans from U.S. government
33
287.5
176.9
115.4
-4.8
204.1
105.9
98.2
.0
231.5
90.4
141.1
.0
212.8
98.4
114.5
.0
470.9
278.3
192.6
.0
555.8
294.0
261.7
.0
673.3
510.5
162.8
.0
592.2
193.0
399.2
.0
578.9
304.7
274.3
.0
653.0
407.1
245.9
.0
543.9
367.9
176.0
.0
253.8
106.9
146.9
.0
34
35
36
37
38
39
180.9
40.5
121.8
-13.7
22.6
9.8
249.8
42.7
195.9
2.5
3.4
5.3
314.4
92.2
173.8
12.6
27.9
7.9
440.9
166.7
210.5
13.2
35.6
14.9
603.0
161.0
296.9
30.1
90.2
24.8
512.1
141.0
189.0
60.2
82.3
39.6
623.6
130.7
280.1
12.4
169.9
30.6
607.0
78.3
475.9
-8.8
41.6
20.1
437.2
57.8
263.2
10.5
117.9
-12.3
422.3
89.8
182.1
-6.2
147.2
9.4
517.3
478.9
-34.0
-52.7
121.8
3.2
342.3
130.2
164.1
6.6
34.3
7.0
20.1
12.8
.2
.3
172.1
115.4
76.5
48.7
-11.5
10.2
.5
23.1
22.5
2.6
-.1
-.1
105.9
98.2
142.4
50.2
-2.2
4.5
-5.0
34.9
13.0
25.5
.1
1.1
90.4
141.1
150.8
45.9
4.1
11.9
-2.0
64.1
46.1
19.7
.1
.2
98.4
114.5
202.2
48.7
-4.6
39.6
8.1
80.7
72.9
52.2
.6
.7
278.3
192.6
321.4
43.0
1.6
62.7
7.2
40.7
61.7
63.7
1.0
1.6
294.0
261.7
305.8
-12.0
2.3
79.3
-2.6
11.2
66.3
103.2
.4
1.8
510.5
162.8
333.9
17.8
3.0
44.0
12.4
40.9
31.1
58.0
1.5
3.3
193.0
399.2
285.5
71.2
-4.6
25.6
-31.1
166.5
72.7
58.6
1.4
3.0
304.7
274.3
309.2
88.4
5.1
-19.7
-17.4
-63.8
111.3
55.2
2.8
1.1
407.1
245.9
224.6
-22.6
-6.1
7.9
16.9
31.2
53.8
20.2
3.3
-4.4
367.9
176.0
116.7
112.6
6.2
11.3
-37.3
234.8
56.5
25.9
-2.9
-.7
106.9
146.9
161.4
44.3
-3.0
11.5
44.4
5.0
40
41
47
43
44
45
46
47
48
49
50
51
Open market paper
Corporate bonds
Bank loans n.e.c
Other loans and advances
Mortgages
By borrowing sector
Commercial banking
Savings institutions
Credit unions
Life insurance companies
Government-sponsored enterprises
Federally related mortgage pools
Issuers of asset-backed securities (ABSs)
Finance companies
Mortgage companies
Real estate investment trusts (REITs)
Brokers and dealers
Funding corporations
A38
1.57
DomesticNonfinancialStatistics • August 2000
FUNDS RAISED IN U.S. CREDIT MARKETS 1 —Continued
1998
Transaction category or sector
1994
1995
1996
1997
2000
1999
1998
Q3
Q4
Ql
Q2
Q3
Q4
Ql
All sectors
52 Total net borrowing, all sectors
1,022.5
1,237.0
1,355.6
1,516.8
2,145.5
1,957.2
2,345.2
2,503.9
1,868.5
2,318.3
2,200.5
1,666.9
Open market paper
U.S. government securities
Municipal securities
Corporate and foreign bonds
Bank loans n.e.c
Other loans and advances
Mortgages
Consumer credit
35.7
448.1
-35.9
157.3
62.9
50.4
179.0
124.9
74.3
348.5
-48.2
336.7
114.7
70.1
202.0
138.9
102.6
376.5
2.6
345.8
92.1
62.5
284.8
88.8
184.1
235.9
71.4
408.2
128.2
102.8
333.6
52.5
193.1
418.3
96.8
540.7
145.0
158.5
525.4
67.6
232.7
442.3
82.9
269.8
171.6
157.8
520.5
79.6
83.0
619.1
89.6
439.1
143.0
262.7
638.7
69.9
154.6
517.0
100.7
750.7
62.1
192.7
595.5
130.5
27.7
466.8
48.0
538.2
38.3
101.1
587.0
61.4
180.6
569.8
77.0
414.3
100.0
224.6
675.8
76.2
556.5
529.6
47.0
104.1
75.3
175.0
603.6
109.5
223.4
49.8
19.3
392.2
126.5
209.2
503.4
143.1
53
54
55
56
57
58
59
60
Funds raised through mutual funds and corporate equities
61 Total net issues
62 Corporate equities
Nonfinancial corporations
63
64
Foreign shares purchased by U.S. residents
65
Financial corporations
66 Mutual fund shares
113.4
131.5
209.1
165.6
76.5
-166.6
12.8
-44.9
48.1
9.6
100.6
-16.0
-58.3
50.4
-8.1
147.4
-28.5
-69.5
60.0
-19.0
237.6
-99.6
-114.4
42.0
-27.1
265.1
-198.1
-267.0
77.8
-8.9
274.6
-340.0
-308.4
-32.8
1.1
173.4
1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables
F.2 through F.4. For ordering address, see inside front cover.
-3.5
153.3
163.5
102.9
148.0
427.2
-228.3
-491.3
317.4
-54.5
224.8
-99.9
-52.1
-33.4
-14.5
253.3
-47.3
-338.4
270.9
20.2
210.9
-20.4
-128.4
108.4
-.3
123.2
-26.5
-55.0
45.2
-16.7
174.5
106.3
62.8
63.0
-19.5
320.9
Flow of Funds
1.58
A3 9
SUMMARY OF FINANCIAL TRANSACTIONS 1
Billions of dollars except as noted; quarterly data at seasonally adjusted annual rates
1999
1998
Transaction category or sector
1994
1995
1996
2000
1998
1997
Q4
Q3
Ql
Q2
Q3
Q4
Ql
N E T LENDING IN C R E D I T M A R K E T S 2
1
Total net lending in credit markets
2
Domestic nonfederal nonfinancial sectors
Household
Nonfinancial corporate business
Nonfarm noncorporate business
State and local governments
Federal government
Rest of the world
Financial sectors
Monetary authority
Commercial banking
U.S.-chartered banks
Foreign banking offices in United States
Bank holding companies
Banks in U.S.-affiliated areas
Savings institutions
Credit unions
Bank personal trusts and estates
Life insurance companies
Other insurance companies
Private pension funds
State and local governmentretirementfunds
Money market mutual funds
Mutual funds
Closed-end funds
Government-sponsored enterprises
Federally related mortgage pools
Asset-backed securities issuers (ABSs)
Finance companies
Mortgage companies
Real estate investment trusts (REITs)
Brokers and dealers
Funding corporations
4
5
6
7
8
9
10
11
12
13
14
11
16
17
18
19
20
21
22
23
24
25
26
27
78
29
30
31
32
33
1,022.5
1,237.0
1,355.6
1,516.8
2,145.5
1,957.2
2,345.2
2,503.9
1,868.5
2,318.3
2,200.5
1,666.9
223.4
260.2
17.7
.6
-55.0
-27.4
132.3
694.1
31.5
163.4
-98.4
-3.0
-8.8
4.7
-91.4
-.2
273.9
1,061.7
12.7
265.9
186.5
75.4
12.0
60.3
-10.2
-4.3
-33.7
-7.4
414.4
936.6
12.3
187.5
119.6
63.3
74.7
-73.8
14.0
.1
134.5
13.5
249.3
1,808.1
21.1
305.2
312.0
-11.9
88.8
-142.2
15.2
.1
215.7
13.8
60.8
1,793.8
41.6
250.1
309.2
-68.1
-261.5
-439.7
36.4
.1
141.7
11.7
390.7
2,204.3
3.5
531.5
540.2
-12.1
423.3
246.4
42.0
2.8
132.2
17.0
253.3
1,810.3
71.8
68.9
134.1
-54.9
14.6
20.7
-9.5
1.4
2.0
3.2
141.3
2,041.4
-65.7
593.1
494.2
49.7
3.9
.7
19.9
6.0
2.9
17.9
-7.4
10.7
113.3
16.0
-13.5
-6.0
-4.4
102.7
34.7
-7.6
397.8
288.3
25.0
1.2
83.3
6.9
37.4
1,426.4
62.4
135.4
231.5
-105.7
.4
195.4
186.3
52.2
.8
-43.9
11.4
382.2
1,729.4
34.1
435.5
410.7
30.6
-.3
4.2
-7.6
16.2
-43.7
-29.0
-12.7
-2.1
.1
5.1
310.7
1,244.6
38.3
324.3
274.9
40.2
5.4
-12.4
6.6
60.9
29.6
86.0
72.1
67.6
174.4
49.5
353.1
103.5
4.5
429.5
-40.8
-19.7
60.6
76.5
227.6
103.0
3.1
157.2
399.2
267.9
92.2
-9.1
1.7
42.6
6.6
22.3
13.5
-9.1
22.5
-7.7
131.0
-120.5
-170.9
36.0
2.6
11.9
7.1
338.9
1,441.4
112.2
382.4
417.6
1.9
-42.5
5.4
39.1
44.8
-226.1
-2.8
148.1
11.2
.9
3.3
6.7
28.1
7.1
72.0
24.9
46.1
30.9
30.0
-7.1
-3.7
117.8
115.4
69.4
-8.3
100.0
21.5
56.0
33.6
86.5
52.5
10.5
86.7
98.2
25.5
16.8
-.9
6.0
36.3
19.0
-7.7
69.6
22.5
52.3
37.3
-25.0
-12.8
104.8
76.9
20.4
88.8
48.9
4.7
84.2
141.1
120.5
-17.8
120.6
49.9
-3.4
1.4
90.1
-21.2
4.4
-15.7
14.0
1,022.5
1,237.0
1,355.6
-5.8
8.8
.0
2.2
.6
35.3
10.0
-12.7
96.6
65.6
142.3
110.5
-16.0
-6.3
-.5
48.3
-24.0
-.7
-44.2
18.4
8.2
3.7
-4.7
25.2
65.5
118.6
21.0
-16.0
65.6
-7.7
95.5
-8.6
38.4
-14.4
45.4
88.0
26.7
150.1
27.3
-92.6
119.9
3.1
259.2
274.3
292.4
79.6
10.2
-2.2
-193.7
245.9
216.1
94.7
-12.1
-2.7
16.3
19.5
98.4
2,345.2
2,503.9
1,868.5
-14.0
-4.0
.0
127.7
49.9
61.1
-48.8
-7.9
668.3
-5.9
204.9
253.3
-99.9
253.3
139.9
-66.6
40.8
272.4
-7.6
-32.0
-7.9
184.6
-5.4
.0
2.1
99.3
90.9
10.1
100.0
42.6
100.5
-27.9
-47.3
210.9
241.2
139.9
75.6
293.4
42.4
-25.9
8.9
1,189.7
66.0
244.0
-2.9
94.3
114.5
4.5
260.8
163.8
281.7
21.9
-9.1
20.2
14.9
51.9
3.2
-5.1
49.8
-7.9
255.5
92.9
4.5
264.7
261.7
260.3
79.5
4.5
-11.3
146.0
-101.5
1,516.8
2,145.5
1,957.2
.7
6.6
.0
.0
-.2
-32.3
47.6
152.4
92.1
285.5
91.3
-198.1
274.6
27.4
103.3
53.3
303.9
11.8
-48.0
-45.6
816.8
8.9
8.6
-.5
.0
106.8
-19.7
41.5
97.1
122.5
157.6
120.9
-99.6
265.1
130.5
111.0
59.3
304.4
15.6
-56.3
-44.4
481.6
.0
1.7
.0
-2.3
-131.9
-340.0
173.4
58.8
149.5
51.7
296.2
27.0
-51.2
-102.2
854.2
124.8
192.6
6.8
32.1
-8.4
63.4
63.8
87.5
80.9
68.7
9.2
88.8
162.8
310.9
75.3
6.0
38.5
232.1
-18.8
3.1
287.5
-9.5
75.9
.1
-11.7
3.1
234.1
176.0
62.1
-13.2
222.1
-70.6
3.1
100.4
146.9
59.8
360.8
86.9
140.8
141.3
-6.0
-16.3
169.2
8.0
113.1
12.3
-7.0
-33.7
347.6
2,318.3
2,200.5
1,666.9
-8.5
114.6
-20.4
123.2
218.1
29.5
65.5
271.9
-3.1
-34.3
-66.2
356.1
-7.0
-4.0
-4.1
-12.9
-62.9
394.3
3.6
379.2
516.7
346.7
-26.5
174.5
96.9
271.3
52.4
311.8
24.4
-32.3
-15.8
501.0
-83.3
RELATION OF LIABILITIES
TO FINANCIAL A S S E T S
34 Net flows through credit markets
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
Other financial sources
Official foreign exchange
Special drawing rights certificates
Treasury currency
Foreign deposits
Net interbank transactions
Checkable deposits and currency
Small time and savings deposits
Large time deposits
Money market fund shares
Security repurchase agreements
Corporate equities
Mutual fund shares
Trade payables
Security credit
Life insurance reserves
Pension fund reserves
Taxes payable
Investment in bank personal trusts
Noncorporate proprietors' equity
Miscellaneous
55 Total financial sources
56
57
58
59
60
61
Liabilities not identified as assets (—)
Treasury currency
Foreign deposits
Net interbank liabilities
Security repurchase agreements
Taxes payable
Miscellaneous
Floats not included in assets (—)
62 Federal government checkable deposits
63 Other checkable deposits
64 Trade credit
65 Total identified to sectors as assets
.7
52.9
89.8
-9.7
-39.9
19.6
43.3
78.2
12.8
100.6
120.0
.1
85.9
-51.6
15.8
97.2
114.0
145.8
-118.7
72.8
281.2
104.4
313.1
-181.8
-228.3
224.8
-61.9
-25.7
59.0
349.6
-68.0
180.3
.8
.0
2.2
52.0
-100.6
-224.2
113.8
121.1
217.5
275.4
106.3
320.9
168.3
517.5
49.2
287.9
35.5
254.4
2.6
17.8
43.0
250.7
128.9
26.7
45.8
235.4
6.2
4.0
35.7
451.1
41.4
-28.5
237.6
114.8
52.4
44.5
247.6
16.0
-8.6
-2.3
504.5
2,088.9
2,761.5
2,975.5
3,311.1
4,087.9
4,059.2
3,627.4
3,786.0
4,409.3
3,950.3
5,107.9
3,980.3
-.2
43.0
-2.7
67.7
16.6
-146.4
-.5
25.1
-3.1
20.2
21.1
-204.8
-.9
59.6
-3.3
4.5
22.8
-70.7
-.6
105.6
-19.9
62.2
26.8
-63.8
-.7
-8.1
3.4
54.1
18.0
-47.4
1.1
70.3
22.3
153.8
28.7
-14.4
-3.4
-157.4
-52.8
-11.1
19.6
-4.9
-1.5
61.8
58.7
209.3
-14.8
-411.4
.6
86.2
-1.7
62.4
5.8
-430.5
.2
9.5
-1.0
48.0
1.6
-460.4
-6.3
32.4
-39.8
-192.6
-3.1
-131.6
.6
-8.5
34.5
571.0
-16.5
-392.7
-4.8
-2.8
27.4
-6.0
-3.8
15.6
.5
-4.0
-21.2
-2.7
-3.9
-29.3
2.6
-3.1
-42.0
32.4
-3.6
-73.3
14.0
-1.8
-44.3
-1.8
-1.9
40.8
-41.4
-1.0
-15.5
23.0
-.5
93.8
-9.5
28.8
.1
.8
60.3
.4
2,091.1
2,897.9
2,988.3
3,236.7
4,111.2
3,841.8
3,869.3
3,846.8
4,744.3
4,236.0
5,398.0
3,761.8
-.1
147.4
1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables
El and F.5. For ordering address, see inside front cover.
84.9
44.7
-24.9
144.7
81.8
367.9
-4.0
2.0
55.1
-35.9
141.0
141.9
105.2
274.8
7.8
2. Excludes corporate equities and mutual fund shares.
.5
-40.4
-29.7
475.0
A40
1.59
DomesticNonfinancialStatistics • August 2000
SUMMARY OF CREDIT MARKET DEBT OUTSTANDING 1
Billions of dollars, end of period
1998
Transaction category or sector
1995
1996
1997
1999
2000
1998
Q4
Q3
Ql
Q2
Q3
Q4
Ql
Nonfinancial sectors
1 Total credit market debt owed by
domestic nonfinancial sectors
By sector and instrument
2 Federal government
3
Treasury securities
4
Budget agency securities and mortgages
5 Nonfederal
13,723.8
14,456.3
15,260.3
16,298.4
15,967.4
16,298.4
16,613.9
16,791.8
17,113.5
17,453.5
17,686.5
3,636.7
3,608.5
28.2
3,781.8
3,755.1
26.6
3,804.9
3,778.3
26.5
3,752.2
3,723.7
28.5
3,720.2
3,694.7
25.5
3,752.2
3,723.7
28.5
3,759.7
3,731.6
28.1
3,651.7
3,623.4
28.3
3,632.7
3,604.5
28.3
3,681.0
3,652.8
28.3
3,653.5
3,625.8
27.8
10,087.1
10,674.6
11,455.5
12,546.2
12,247.2
12,546.2
12,854.2
13,140.1
13,480.7
13,772.5
14,033.0
6
7
8
9
10
11
12
13
14
15
16
By instrument
Commercial paper
Municipal securities and loans
Corporate bonds
Bank loans n.e.c
Other loans and advances
Mortgages
Home
Multifamily residential
Commercial
Farm
Consumer credit
157.4
1,293.5
1,344.1
863.6
736.9
4,568.8
3,510.4
265.5
708.4
84.6
1,122.8
156.4
1,296.0
1,460.4
934.1
770.4
4,845.7
3,718.8
278.7
761.1
87.1
1,211.6
168.6
1,367.5
1,610.9
1,040.5
839.5
5,164.4
3,970.7
287.1
816.4
90.3
1,264.1
193.0
1,464.3
1,829.6
1,148.8
913.8
5,665.0
4,354.0
305.9
908.7
96.5
1,331.7
216.9
1,439.9
1,781.3
1,120.6
886.8
5,515.2
4,245.9
299.3
875.7
94.4
1,286.6
193.0
1,464.3
1,829.6
1,148.8
913.8
5,665.0
4,354.0
305.9
908.7
96.5
1,331.7
223.9
1,491.0
1,898.1
1,165.2
957.4
5,799.4
4,446.5
315.0
940.5
97.4
1,319.3
232.4
1,510.0
1,970.0
1,178.5
953.5
5,955.4
4,559.7
323.3
972.8
99.6
1,340.4
239.3
1,518.6
2,020.7
1,202.9
967.1
6,162.0
4,689.6
334.8
1,036.2
101.4
1,370.1
230.3
1,532.5
2,059.5
1,231.5
982.8
6,309.9
4,786.8
346.9
1,074.2
102.0
1,426.2
260.8
1,539.2
2,106.7
1,256.8
1,030.4
6,422.8
4,860.2
355.3
1,104.4
103.0
1,416.2
17
18
19
20
21
22
By borrowing sector
Household
Nonfinancial business
Corporate
Nonfarm noncorporate
Farm
State and local government
4,782.8
4,234.1
2,936.6
1,152.4
145.1
1,070.2
5,104.9
4,506.2
3,120.2
1,236.1
149.9
1,063.4
5,441.9
4,894.1
3,386.8
1,351.1
156.1
1,119.5
5,920.1
5,426.2
3,801.5
1,460.9
163.8
1,199.8
5,761.5
5,306.9
3,712.2
1,431.6
163.1
1,178.8
5,920.1
5,426.2
3,801.5
1,460.9
163.8
1,199.8
6,000.0
5,631.0
3,983.3
1,485.2
162.4
1,223.2
6,142.4
5,759.4
4,083.1
1,510.2
166.1
1,238.2
6,308.8
5,929.5
4,220.0
1,540.9
168.6
1,242.4
6,464.4
6,055.5
4,314.4
1,572.0
169.1
1,252.5
6,532.8
6,242.1
4,472.9
1,599.9
169.4
1,258.1
23 Foreign credit market debt held in
United States
441.4
518.7
570.1
603.7
612.8
603.7
607.8
598.2
614.7
618.2
646.6
24
25
26
27
56.2
291.9
34.6
58.8
67.5
347.7
43.7
59.8
65.1
394.9
52.1
58.0
72.9
420.0
58.9
52.0
74.0
428.6
56.4
53.8
72.9
420.0
58.9
52.0
77.2
420.2
59.1
51.3
70.1
417.1
60.5
50.5
81.8
424.4
58.8
49.7
89.2
420.1
59.4
49.5
101.6
429.9
63.3
51.8
14,165.3
14,975.0
15,830.5
16,902.1
16,580.2
16,902.1
17,221.7
17,390.0
17,728.2
18,071.8
18,333.1
Commercial paper
Bonds
Bank loans n.e.c
Other loans and advances
28 Total credit market debt owed by nonfinancial
sectors, domestic and foreign
Financial sectors
29 Total credit market debt owed by
financial sectors
4,278.8
4,824.6
5,445.2
6,519.1
6,199.5
6,519.1
6,809.0
7,073.3
7,346.9
7,607.0
7,745.5
30
31
32
33
34
35
36
37
38
39
By instrument
Federal government-related
Government-sponsored enterprise securities
Mortgage pool securities
LoansfromU.S. government
Private
Open market paper
Corporate bonds
Bank loans n.e.c
Other loans and advances
Mortgages
2,376.8
806.5
1,570.3
.0
1,901.9
486.9
1,204.7
51.4
135.0
24.1
2,608.3
896.9
1,711.4
.0
2,216.3
579.1
1,378.4
64.0
162.9
31.9
2,821.1
995.3
1,825.8
.0
2,624.1
745.7
1,555.9
77.2
198.5
46.8
3,292.0
1,273.6
2,018.4
.0
3,227.1
906.7
1,852.8
107.2
288.7
71.6
3,121.7
1,146.0
1,975.7
.0
3,077.8
874.2
1,790.2
103.2
246.2
64.0
3,292.0
1,273.6
2,018.4
.0
3,227.1
906.7
1,852.8
107.2
288.7
71.6
3,434.1
1,321.8
2,112.3
.0
3,374.9
926.4
1,968.6
104.1
299.1
76.6
3,580.7
1,398.0
2,182.7
.0
3,492.6
940.9
2,042.8
106.8
328.6
73.6
3,745.9
1,499.8
2,246.1
.0
3,601.1
963.4
2,091.2
105.2
365.4
75.9
3,884.0
1,591.7
2,292.3
.0
3,723.0
1,082.9
2,074.6
92.9
395.8
76.7
3,940.8
1,618.5
2,322.3
.0
3,804.7
1,115.7
2,112.6
93.6
404.4
78.5
40
41
42
43
44
45
46
47
48
49
50
51
52
By borrowing sector
Commercial banks
Bank holding companies
Savings institutions
Credit unions
Life insurance companies
Government-sponsored enterprises
Federallyrelatedmortgage pools
Issuers of asset-backed securities (ABSs)
Brokers and dealers
Finance companies
Mortgage companies
Real estate investment trusts (REITs)
Funding corporations
102.6
148.0
115.0
.4
.5
806.5
1,570.3
712.5
29.3
483.9
16.5
44.6
248.6
113.6
150.0
140.5
.4
1.6
896.9
1,711.4
863.3
27.3
529.8
20.6
56.5
312.7
140.6
168.6
160.3
.6
1.8
995.3
1,825.8
1,076.6
35.3
554.5
16.0
96.1
373.7
188.6
193.5
212.4
1.1
2.5
1,273.6
2,018.4
1,398.0
42.5
597.5
17.7
158.8
414.4
169.6
196.1
186.6
1.0
2.0
1,146.0
1,975.7
1,310.9
39.4
589.4
16.9
147.8
417.9
188.6
193.5
212.4
1.1
2.5
1,273.6
2,018.4
1,398.0
42.5
597.5
17.7
158.8
414.4
187.5
202.6
226.9
1.5
3.3
1,321.8
2,112.3
1,463.1
34.8
614.4
16.5
165.2
459.1
202.7
205.5
241.6
1.8
4.0
1,398.0
2,182.7
1,539.9
30.4
639.2
17.8
160.3
449.5
224.2
211.9
255.4
2.5
4.3
1,499.8
2,246.1
1,599.1
34.6
628.5
16.3
162.2
462.0
230.0
219.3
260.4
3.4
3.2
1,591.7
2,292.3
1,632.0
25.3
659.9
17.8
165.1
506.6
242.2
221.4
266.9
2.6
3.0
1,618.5
2,322.3
1,665.8
36.4
670.4
17.1
167.9
510.9
All sectors
53 Total credit market debt, domestic and foreign . . .
54
55
56
57
58
59
60
61
Open market paper
U.S. government securities
Municipal securities
Corporate and foreign bonds
Bank loans n.e.c
Other loans and advances
Mortgages
Consumer credit
18,444.0
19,799.6
21,275.7
23,421.2
22,779.6
23,421.2
24,030.7
24,463.3
25,075.1
25,678.8
26,078.6
700.4
6,013.6
1,293.5
2,840.7
949.6
930.6
4,592.9
1,122.8
803.0
6,390.0
1,296.0
3,186.5
1,041.7
993.1
4,877.7
1,211.6
979.4
6,626.0
1,367.5
3,561.7
1,169.8
1,095.9
5,211.2
1,264.1
1,172.6
7,044.3
1,464.3
4,102.4
1,314.9
1,254.4
5,736.7
1,331.7
1,165.1
6,841.9
1,439.9
4,000.0
1,280.3
1,186.8
5,579.2
1,286.6
1,172.6
7,044.3
1,464.3
4,102.4
1,314.9
1,254.4
5,736.7
1,331.7
1,227.6
7,193.8
1,491.0
4,286.9
1,328.3
1,307.8
5,876.0
1,319.3
1,243.3
7,232.4
1,510.0
4,429.9
1,345.7
1,332.6
6,029.0
1,340.4
1,284.5
7,378.6
1,518.6
4,536.2
1,366.9
1,382.2
6,237.9
1,370.1
1,402.4
7,565.0
1,532.5
4,554.2
1,383.8
1,428.1
6,386.6
1,426.2
1,478.1
7,594.3
1,539.2
4,649.2
1,413.6
1,486.6
6,501.3
1,416.2
1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables
L.2 through L.4. For ordering address, see inside front cover.
1.60
Flow of Funds
A41
1999
2000
SUMMARY OF FINANCIAL ASSETS AND LIABILITIES 1
B i l l i o n s o f d o l l a r s e x c e p t a s n o t e d , e n d of p e r i o d
1998
Transaction category or sector
1995
1996
1997
1998
Q3
Q4
QL
Q2
Q3
Q4
QL
24,463.3
25,075.1
25,678.8
26,078.6
3,118.0
1,998.8
298.9
37.5
782.8
256.4
2,737.9
19,566.5
478.1
4,644.0
4,078.9
484.1
32.7
48.3
1,033.4
351.7
185.7
1,881.7
532.0
1,050.1
748.6
1,147.8
1,074.0
105.9
1,397.5
2,292.3
1,435.3
713.3
35.6
42.9
158.6
258.1
3,072.7
1,963.6
285.5
38.1
785.4
259.7
2,826.5
19,919.7
501.9
4,724.7
4,171.2
481.9
22.0
49.7
1,044.0
360.1
183.3
1,903.8
532.0
1,065.7
745.3
1,217.1
1,055.0
106.7
1,422.2
2,322.3
1,463.9
747.0
34.1
38.8
200.9
250.9
CREDIT MARKET DEBT OUTSTANDING2
1 Total credit market assets
7 Domestic nonfederal nonfinancial sectors
Household
Nonfinancial corporate business
4
Nonfarm noncorporate business
5
State and local governments
6
1 Federal government
8 Rest of the world
9 Financial sectors
Monetary authority
10
Commercial banking
11
U.S.-chartered banks
17
Foreign banking offices in United States
13
Bank holding companies
14
Banks in U.S. affiliated areas
15
Savings institutions
16
Credit unions
17
Bank personal trusts and estates
18
Life insurance companies
19
Other insurance companies
7.0
Private pension funds
21
State and local government retirement funds
2.2
73
Money market mutual funds
Mutual funds
74
Closed-end funds
75
Government-sponsored enterprises
26
Federally related mortgage pools
27
Asset-backed securities issuers (ABSs)
78
Finance companies
29
Mortgage companies
30
Real estate investment trusts (REITs)
31
Brokers and dealers
37
Funding corporations
33
18,444.0
19,799.6
21,275.7
23,421.2
22,779.6
23,421.2
24,030.7
2,953.6
1,885.2
259.8
36.6
772.1
218.1
2,601.8
18,257.1
466.0
4,338.4
3,782.9
487.8
25.0
42.7
990.8
330.2
192.2
1,853.5
530.8
968.5
717.2
1,036.2
1,050.8
103.6
1,201.9
2,112.3
1,280.1
639.9
33.0
45.9
211.4
154.4
3,006.2
1,907.8
266.7
36.9
794.8
219.8
2,609.8
18,627.5
485.1
4,383.4
3,847.6
465.7
25.1
45.0
1,011.4
341.0
190.1
1,869.6
537.5
1,006.0
724.0
1,001.8
1,083.8
104.3
1,267.0
2,182.7
1,352.7
660.9
35.6
45.3
162.9
182.2
3,064.9
1,962.7
283.2
37.1
781.9
255.6
2,706.2
19,048.5
489.3
4,488.3
3,944.3
475.3
22.0
46.7
1,030.8
348.5
188.0
1,880.4
533.9
1,017.4
733.6
1,049.7
1,083.1
105.1
1,338.6
2,246.1
1,409.8
678.2
32.5
44.7
167.0
183.5
2,846.3
1,885.0
280.4
42.3
638.6
202.7
1,531.1
13,863.9
380.8
3,520.1
3,056.1
412.6
18.0
33.4
913.3
263.0
239.7
1,587.5
468.7
716.9
531.0
545.5
771.3
96.4
750.0
1,570.3
653.4
526.2
33.0
26.0
183.4
87.4
2,903.6
1,990.6
270.2
38.0
604.8
195.3
1,926.6
14,774.1
393.1
3,707.7
3.175.8
475.8
22.0
34.1
933.2
288.5
232.0
1,657.0
491.2
769.2
568.2
634.3
820.2
101.1
807.9
1,711.4
773.9
544.5
41.2
30.4
167.7
101.4
2,816.2
1,917.9
257.5
35.9
605.0
200.4
2,256.8
16,002.3
431.4
4,031.9
3,450.7
516.1
27.4
37.8
928.5
305.3
207.0
1,751.1
515.3
834.7
632.0
721.9
901.1
98.3
902.2
1,825.8
937.7
566.4
32.1
50.6
182.6
146.5
2,862.6
1,815.8
271.5
35.9
739.4
213.9
2,534.3
17,810.4
452.5
4,335.7
3,761.2
504.2
26.5
43.8
964.8
324.2
194.1
1,828.0
535.7
953.4
698.0
965.9
1,025.9
102.8
1,163.0
2,018.4
1,219.4
618.4
35.3
45.5
189.4
140.0
2,911.9
1,927.2
245.2
35.9
703.6
210.9
2,412.2
17,244.6
446.5
4,195.7
3,616.2
510.1
28.3
41.1
939.3
320.5
197.5
1,810.6
518.8
909.8
685.7
869.9
1,005.9
101.7
1,055.4
1,975.7
1,138.1
592.7
33.8
55.7
245.9
145.7
2,862.6
1,815.8
271.5
35.9
739.4
213.9
2,534.3
17,810.4
452.5
4,335.7
3,761.2
504.2
26.5
43.8
964.8
324.2
194.1
1,828.0
535.7
953.4
698.0
965.9
1,025.9
102.8
1,163.0
2,018.4
1,219.4
618.4
35.3
45.5
189.4
140.0
18,444.0
19,799.6
21,275.7
23,421.2
22,779.6
23,421.2
24,030.7
24,463.3
25,075.1
25,678.8
26,078.6
63.7
10.2
18.2
418.8
290.7
1,229.3
2,279.7
476.9
745.3
660.0
1,852.8
305.7
566.2
5,766.9
1,698.0
107.6
803.0
5,645.8
53.7
9.7
18.3
516.1
240.8
1,245.1
2,377.0
590.9
891.1
701.5
2,342.4
358.1
610.6
6,642.6
1,812.8
123.6
871.7
6,017.1
48.9
9.2
18.3
618.8
219.4
1,286.6
2,474.1
713.4
1,048.7
822.4
2,989.4
469.1
665.0
7,895.8
1,943.3
139.2
942.5
6,333.6
60.1
9.2
18.3
639.9
189.0
1,334.2
2,626.5
805.5
1,334.2
913.7
3,610.5
572.3
718.3
9,097.6
1,970.7
151.0
1,001.0
6,868.7
54.5
9.2
18.8
651.7
198.9
1,282.3
2,553.8
776.5
1,249.7
960.5
3,137.3
573.6
703.5
8,123.6
1,958.4
153.3
908.6
6,806.7
60.1
9.2
18.3
639.9
189.0
1,334.2
2,626.5
805.5
1,334.2
913.7
3,610.5
572.3
718.3
9,097.6
1,970.7
151.0
1,001.0
6,868.7
53.6
8.2
18.3
671.8
182.0
1,311.4
2,637.6
804.3
1,416.0
980.3
3,758.4
552.7
730.9
9,275.8
1,972.9
157.9
1,012.5
6,843.5
50.9
8.2
18.8
696.6
203.5
1,354.1
2,644.6
809.0
1,398.1
970.8
4,049.1
589.3
749.8
9,731.4
2,032.7
160.5
1,059.8
6,954.3
52.1
7.2
19.3
710.4
196.0
1,354.9
2,665.9
837.5
1,449.6
999.3
3,932.1
593.2
766.2
9,479.4
2,092.8
163.6
998.3
6,965.4
50.1
6.2
18.3
707.2
197.4
1,485.8
2,670.9
935.8
1,584.8
1,085.4
4,552.4
665.9
779.3
10,386.8
2,144.7
165.0
1,116.6
6,821.6
49.4
6.2
18.8
720.2
152.7
1,393.5
2,728.5
966.1
1,671.2
1,157.0
4,751.9
792.7
791.6
10,395.6
2,153.7
174.2
1,135.2
7,169.1
41,382.7
45,222.6
49,913.2
55,341.8
52,900.6
55,341.8
56,418.8
57,944.8
58,358.3
61,053.1
62,306.1
22.1
8,495.7
3,672.2
21.4
10,255.8
3,878.2
21.1
13,181.4
4,149.8
21.6
15,413.4
4,387.2
21.2
13,121.2
4,322.3
21.6
15,413.4
4,387.2
20.7
15,893.6
4,442.5
20.8
17,018.0
4,499.8
21.3
16,008.3
4,557.5
21.4
18,876.7
4,602.6
21.4
19,557.9
4,639.6
-5.8
360.2
-9.0
86.4
62.4
-1,241.8
-6.7
431.4
-10.6
90.9
76.7
-1,692.7
-7.3
532.9
-32.2
153.0
92.3
-2,075.3
-8.0
545.9
-27.0
207.2
101.5
-2,659.9
-7.2
564.1
-15.4
216.7
100.4
-2,338.1
-8.0
545.9
-27.0
207.2
101.5
-2,659.9
-8.4
561.4
-11.3
263.5
88.9
-2,882.3
-8.2
582.9
-10.6
275.4
110.2
-2,998.6
-8.2
585.3
-13.0
293.9
92.5
-3,375.9
-9.7
593.4
-25.0
238.9
93.1
-3,717.7
-9.6
591.3
-13.7
386.0
82.8
-3,554.4
3.1
34.2
198.2
-1.6
30.1
176.7
-8.1
26.2
137.0
-3.9
23.1
94.3
-12.0
15.7
31.3
-3.9
23.1
94.3
-7.2
18.9
48.7
-12.4
22.1
29.2
-10.2
14.5
49.7
-9.9
22.3
139.2
-6.5
18.7
83.9
54,084.9
60,283.8
68,447.0
76,890.6
71,809.7
76,890.6
78,703.5
81,493.2
81,316.7
87,229.1
88,946.4
RELATION OF LIABILITIES
TO FINANCIAL ASSETS
34 Total credit market debt
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
Other liabilities
Official foreign exchange
Special drawing rights certificates
Foreign deposits
Net interbank liabilities
Checkable deposits and currency
Small time and savings deposits
Large time deposits
Money market fund shares
Security repurchase agreements
Mutual fund shares
Life insurance reserves
Pension fund reserves
Trade payables
Taxes payable
Investment in bank personal trusts
Miscellaneous
53 Total liabilities
Financial assets not included in liabilities ( + )
54 Gold and special drawing rights
55 Corporate equities
56 Household equity in noncorporate business
57
58
59
60
61
62
Liabilities not identified as assets ( — )
Treasury currency
Foreign deposits
Net interbank transactions
Security repurchase agreements
Taxes payable
Floats not included in assets (—)
63 Federal government checkable deposits
64 Other checkable deposits
65 Trade credit
66 Total identified to sectors as assets
1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables
L.l and L.5. For ordering address, see inside front cover.
2. Excludes corporate equities and mutual fund shares.
A42
2.10
Domestic Nonfinancial Statistics • August 2000
NONFINANCIAL BUSINESS ACTIVITY
Selected Measures
Monthly data seasonally adjusted, and indexes 1992=100, except as noted
1999
Measure
1997
1998
2000
1999
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.1
Mar.r
Apr.
Mayp
1 Industrial production1
127.1
132.4
137.1
138.1
139.1
139.4
140.1
141.1
141.6
142.6
143.6
144.2
Market groupings
Products, total
Final, total
Consumer goods
Equipment
Intermediate
Materials
119.6
121.1
115.1
132.1
115.3
139.0
123.7
125.4
116.2
142.7
118.8
146.5
126.5
128.0
116.9
148.9
122.1
154.8
127.6
129.1
117.1
150.2
122.6
155.7
128.5
130.2
118.2
151.2
123.2
156.8
128.0
129.8
117.6
151.4
122.4
158.8
128.5
130.3
118.1
151.8
123.1
159.7
129.7
131.6
118.8
154.2
123.7
160.5
130.1
131.8
118.7
155.0
124.8
161.2
130.5
132.2
118.5
156.6
125.0
163.2
131.2
133.1
119.1
158.1
125.0
164.9
131.4
133.5
119.0
159.4
124.8
166.0
130.1
136.4
142.3
142.9
144.2
145.0
145.6
146.7
147.2
148.3
149.3
149.7
82.4
80.9
79.8
79.7
80.2
80.3
80.3
80.7
80.7
81.0
81.3
81.2
10 Construction contracts3
144.l r
160.9r
176.9r
173.0
173.0
175.0
173.0r
173.0
177.0
188.0
177.0
169.0
11 Nonagricultural employment, total4
12
Goods-producing, total
13
Manufacturing, total
14
Manufacturing, production workers
15
Service-producing
16 Personal income, total
17
Wages and salary disbursements
18
Manufacturing
19
Disposable personal income5
20 Retail sales5
120.3
101.2
98.3
99.6
126.5
175.4
171.3
144.6
172.9
169.8
123.4
102.7
98.8
99.8
130.0
185.7
184.4
152.4
181.7
178.4r
126.2
102.3
97.0
97.8
133.8
196.6
197.0
156.9
191.9
194.5r
126.8r
103.2r
97.3r
98. r
134.31"
198.1
199.5
158.6
193.0
197.9r
127.0r
103.3r
913'
98.l r
134.6r
200.5
200.7
159.7
195.6
198.8r
127.3r
103.5r
97.3r
98.l r
134.9r
201.3
201.3
158.8
196.4
200.8r
127.5r
103.6r
913'
98.r
135.2r
201.9
202.6
158.8
196.7
204.0r
127.9r
104. l r
97.4r
98.2r
135.5r
203.3
204.4
160.2
198.0r
205.5r
128.0
103.9
97.2
98.0
135.7
204.0
205.0
160.9
198.6
208.3
128.5
104.3
97.3
97.9
136.2
205.4
206.3
161.2
200.0
209.3
128.9
104.2
97.3
98.0
136.8
206.8
208.2
163.2
201.3
208.1
129.1
104.0
97.2
97.9
137.1
n.a.
n.a.
n.a.
207.4
Prices6
21 Consumer (1982-84=100)
22 Producer finished goods (1982=100)
160.5
131.8
163.0
130.7
166.6
133.0
167.9
134.7
168.2
135.1
168.3
134.9
168.3
134.9
168.7
134.7
169.7
136.0
171.1
137.0
171.2
137.0
171.3
137.5
2
3
4
5
6
7
Industry groupings
8 Manufacturing
9 Capacity utilization, manufacturing (percent)2. .
1. Data in this table appear in the Board's G.17 (419) monthly statistical release. The data
are also available on the Board's web site, http://www.federalreserve.gov/releases/gl7. The
latest historical revision of the industrial production index and the capacity utilization rates
was released in November 1999. The recent annual revision is described in an article in the
March 2000 issue of the Bulletin. For a description of the methods of estimating industrial
production and capacity utilization, see "Industrial Production and Capacity Utilization:
Historical Revision and Recent Developments," Federal Reserve Bulletin, vol. 83 (February
1997), pp. 67-92, and the references cited therein. For details about the construction of
individual industrial production series, see "Industrial Production: 1989 Developments and
Historical Revision," Federal Reserve Bulletin, vol. 76 (April 1990), pp. 187-204.
2. Ratio of index of production to index of capacity. Based on data from the Federal
Reserve, U.S. Department of Commerce, and other sources.
2.11
3. Index of dollar value of total construction contracts, including residential, nonresidential, and heavy engineering, from McGraw-Hill Information Systems Company, F.W. Dodge
Division.
4. Based on data from the U.S. Department of Labor, Employment and Earnings. Series
covers employees only, excluding personnel in the armed forces.
5. Based on data from U.S. Department of Commerce, Survey of Current Business.
6. Based on data not seasonally adjusted. Seasonally adjusted data for changes in the price
indexes can be obtained from the U.S. Department of Labor, Bureau of Labor Statistics,
Monthly Labor Review.
NOTE. Basic data (not indexes) for series mentioned in notes 4 and 5, and indexes for series
mentioned in notes 3 and 6, can also be found in the Survey of Current Business.
LABOR FORCE, EMPLOYMENT, A N D UNEMPLOYMENT
T h o u s a n d s of persons; monthly data seasonally adjusted
1999r
Category
1997
1998
2000
1999
Oct.
Nov.
Dec.
Jan.r
Feb.r
Mar.r
Apr.
Mayp
HOUSEHOLD SURVEY DATA1
1 Civilian labor force2
Employment
2
Nonagricultural industries3
3
Agriculture
Unemployment
4
Number
5
Rate (percent of civilian labor force)
136,297
137,673
139,368
139,697
139,834
140,108
140,910
141,165
140,867
141,230
140,489
126.159
3.399
128,085
3,378
130,207
3,281
130,702
3,238
130,788
3,310
131,141
3,279
131,850
3,371
131,954
3,408
131,801
3,359
132,351
3,355
131,417
3,298
6,739
4.9
6,210
4.5
5,880
4.2
5,757
4.1
5,736
4.1
5,688
4.1
5,689
4.0
5,804
4.1
5,708
4.1
5,524
3.9
5,774
4.1
122,690
125,826
128,616
129,523
129,788
130,038
130,387
130,482
131,009
131,423
131,654
18,675
596
5,691
6,408
28,614
7,109
36,040
19,557
18,772
590
5,985
6,600
29,127
7,407
37,526
19,819
18,431
535
6,273
6,792
29,792
7,632
39,000
20,161
18,484
529
6,470
6,875
29,836
7,599
39,482
20,248
18,484
527
6,516
6,898
29,882
7,604
39,606
20,271
18,479
530
6,552
6,911
29,938
7,613
39,707
20,308
18,495
530
6,652
6,925
29,978
7,612
39,844
20,351
18,473
533
6,618
6,937
29,989
7,624
39,914
20,394
18,476
536
6,726
6,953
30,060
7,621
40,090
20,547
18,486
539
6,692
6,973
30,254
7,611
40,203
20,665
18,469
538
6,663
6,962
30,183
7,607
40,220
21,012
ESTABLISHMENT SURVEY DATA
6 Nonagricultural payroll employment4
7
8
9
10
11
12
13
14
Manufacturing
Mining
Contract construction
Transportation and public utilities
Trade
Finance
Service
Government
1. Beginning January 1994, reflects redesign of current population survey and population
controls from the 1990 census.
2. Persons sixteen years of age and older, including Resident Armed Forces. Monthly
figures are based on sample data collected during the calendar week that contains the twelfth
day; annual data are averages of monthly figures. By definition, seasonality does not exist in
population figures.
3. Includes self-employed, unpaid family, and domestic service workers.
4. Includes all full- and part-time employees who worked during, or received pay for, the
pay period that includes the twelfth day of the month; excludes proprietors, self-employed
persons, household and unpaid family workers, and members of the armed forces. Data are
adjusted to the March 1992 benchmark, and only seasonally adjusted data are available at this
time.
SOURCE. Based on data from U.S. Department of Labor, Employment and Earnings.
Selected Measures
2.12
A43
OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1
Seasonally adjusted
1999
2000
2000
1999
2000
1999
Series
Q2
Q3
Ql r
Q4
Output (1992=100)
Q2
Q3
Q4
Ql
r
Capacity (percent of 1992 output)
Q2
Q3
Q4
Ql r
Capacity utilization rate (percent)2
81.6
1 Total industry
136.1
137.7
139.5
141.8
169.2
170.7
172.3
173.8
80.5
80.7
81.0
2 Manufacturing
140.9
142.5
144.9
147.4
176.9
178.7
180.6
182.4
79.6
79.7
80.3
80.8
Primary processing3
Advanced processing4
122.5
150.5
123.4
152.5
125.4
155.2
126.0
158.7
148.2
191.4
149.0
193.7
149.8
196.1
150.4
198.7
82.7
78.6
82.8
78.7
83.7
79.1
83.7
79.9
6
7
8
9
10
11
12
13
Durable goods
Lumber and products
Primary metals
Iron and steel
Nonferrous
Industrial machinery and equipment
Electrical machinery
Motor vehicles and parts
Aerospace and miscellaneous
transportation equipment
170.8
122.5
125.1
121.4
129.6
227.9
374.6
150.6
174.4
120.5
128.7
126.6
131.2
232.3
400.9
153.3
177.4
120.6
130.9
129.1
133.3
239.9
419.0
154.7
182.4
121.1
132.4
130.9
134.2
252.4
458.2
155.2
214.2
146.3
148.5
150.0
146.8
275.5
482.0
184.8
217.6
147.4
149.3
151.3
147.0
285.3
498.5
184.9
221.0
148.4
150.1
152.5
147.2
295.8
514.6
185.0
224.8
149.0
150.7
153.5
147.5
306.1
537.2
185.7
79.8
83.7
84.2
80.9
88.3
82.7
77.7
81.5
80.2
81.7
86.2
83.7
89.3
81.4
80.4
82.9
80.3
81.2
87.2
84.6
90.5
81.1
81.4
83.6
81.2
81.2
87.8
85.3
91.0
82.5
85.3
83.6
95.9
93.8
89.9
87.7
126.6
126.2
125.8
125.2
75.7
74.3
71.5
70.0
14
15
16
17
18
19
Nondurable goods
Textile mill products
Paper and products
Chemicals and products
Plastics materials
Petroleum products
111.6
111.1
115.1
116.3
123.5
114.1
111.5
111.6
116.0
117.0
124.2
114.6
113.4
111.4
117.9
121.8
132.3
114.1
113.7
111.3
117.1
121.7
134.0
115.9
139.5
131.5
134.5
150.4
137.2
122.2
139.9
131.6
135.3
150.7
138.4
122.7
140.3
131.8
136.1
151.0
139.6
123.1
140.5
131.9
136.6
151.4
140.8
123.4
80.0
84.5
85.6
77.3
90.0
93.3
79.7
84.8
85.7
77.6
89.7
93.4
80.9
84.5
86.6
80.7
94.8
92.7
80.9
84.4
85.7
80.4
95.2
93.9
97.1
116.6
118.9
98.2
118.4
120.8
99.5
113.2
116.5
100.4
114.4
116.0
120.3
127.3
125.2
120.2
127.8
125.6
120.2
128.2
126.1
119.8
128.6
126.6
80.7
91.6
95.0
81.7
92.7
96.2
82.8
88.3
92.4
83.8
88.9
91.6
1973
1975
Previous cycle5
1999
1999
High
Low
High
May
Dec.
3
4
?0 Mining
71 Utilities
Electric
22
Low
Latest cycle6
High
Low
2000
Jan.
Feb.r
Mar.r
Apr.
Mayp
82.1
Capacity utilization rate (percent)2
1 Total industry
89.2
72.6
87.3
71.1
85.4
78.1
80.5
81.1
81.4
81.5
81.8
82.1
2 Manufacturing
88.5
70.5
86.9
69.0
85.7
76.6
79.7
80.3
80.7
80.7
81.0
81.3
81.2
91.2
87.2
68.2
71.8
88.1
86.7
66.2
70.4
88.9
84.2
77.7
76.1
82.7
78.7
83.9
79.2
83.9
79.7
83.7
79.7
83.6
80.2
83.9
80.4
83.5
80.5
Durable goods
Lumber and products
Primary metals
Iron and steel
Nonferrous
Industrial machinery and
equipment
Electrical machinery
Motor vehicles and parts
Aerospace and miscellaneous
transportation equipment
89.2
88.7
100.2
105.8
90.8
68.9
61.2
65.9
66.6
59.8
87.7
87.9
94.2
95.8
91.1
63.9
60.8
45.1
37.0
60.1
84.6
93.6
92.7
95.2
89.3
73.1
75.5
73.7
71.8
74.2
79.7
84.7
83.5
80.1
87.6
80.3
81.6
88.3
86.1
91.0
81.0
82.0
88.2
85.4
91.7
80.9
81.3
86.9
84.1
90.3
81.6
80.4
88.4
86.3
90.9
81.9
80.2
88.6
86.0
91.8
82.0
80.1
88.1
85.7
91.1
96.0
89.2
93.4
74.3
64.7
51.3
93.2
89.4
95.0
64.0
71.6
45.5
85.4
84.0
89.1
72.3
75.0
55.9
82.9
77.4
81.5
80.7
82.0
82.5
81.8
84.0
84.5
82.5
84.9
82.6
83.1
86.9
83.6
83.3
88.0
83.6
83.0
88.3
84.1
78.4
67.6
81.9
66.6
87.3
79.2
75.8
71.4
70.6
69.9
69.6
69.2
69.3
Nondurable goods
Textile mill products
Paper and products
Chemicals and products
Plastics materials
Petroleum products
87.8
91.4
97.1
87.6
102.0
96.7
71.7
60.0
69.2
69.7
50.6
81.1
87.5
91.2
96.1
84.6
90.9
90.0
76.4
72.3
80.6
69.9
63.4
66.8
87.3
90.4
93.5
86.2
97.0
88.5
80.7
77.7
85.0
79.3
74.8
85.1
80.2
84.4
85.2
77.8
90.5
93.4
81.0
83.5
86.3
81.3
94.9
93.3
80.8
84.5
85.7
80.4
91.9
91.8
81.0
84.0
85.3
80.8
102.4
93.7
80.8
84.7
86.1
79.9
91.3
96.2
80.8
85.3
87.2
79.8
92.4
95.2
80.6
84.6
86.4
79.4
91.6
95.8
94.3
96.2
99.0
88.2
82.9
82.7
96.0
89.1
88.2
80.3
75.9
78.9
88.0
92.6
95.0
87.0
83.4
87.1
81.0
91.1
94.6
82.8
88.4
92.6
83.1
89.2
91.8
83.5
89.7
91.7
84.9
87.9
91.4
85.3
90.1
93.3
85.7
91.3
94.9
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
Primary processing3
Advanced processing4
70 Mining
?1 Utilities
22 Electric
1. Data in this table appear in the Board's G. 17 (419) monthly statistical release. The data
are also available on the Board's web site, http://www.federalreserve.gov/releases/gl7. The
latest historical revision of the industrial production index and the capacity utilization rates
was released in November 1999. The recent annual revision is described in an article in the
March 2000 issue of the Bulletin. For a description of the methods of estimating industrial
production and capacity utilization, see "Industrial Production and Capacity Utilization:
Historical Revision and Recent Developments," Federal Reserve Bulletin, vol. 83 (February
1997), pp. 67-92, and the references cited therein. For details about the construction of
individual industrial production series, see "Industrial Production: 1989 Developments and
Historical Revision," Federal Reserve Bulletin, vol. 76 (April 1990), pp. 187-204.
2. Capacity utilization is calculated as the ratio of the Federal Reserve's seasonally adjusted
index of industrial production to the corresponding index of capacity.
3. Primary processing includes textiles; lumber; paper; industrial chemicals; synthetic
materials; fertilizer materials; petroleum products; rubber and plastics; stone, clay, and glass;
primary metals; and fabricated metals.
4. Advanced processing includes foods; tobacco; apparel; furniture and fixtures; printing
and publishing; chemical products such as drugs and toiletries; agricultural chemicals; leather
and products; machinery; transportation equipment; instruments; and miscellaneous manufactures.
5. Monthly highs, 1978-80; monthly lows, 1982.
6. Monthly highs, 1988-89; monthly lows, 1990-91.
A44
2.13
Domestic Nonfinancial Statistics • August 2 0 0 0
INDUSTRIAL PRODUCTION
Indexes and Gross Value1
M o n t h l y data seasonally adjusted
Group
1992
proportion
1999
2000
1999
avg.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb/
Mar/
Apr.
Mayp
Index (1992 = 100)
MAJOR MARKETS
100.0
137.1
136.2
136.6
137.4
137.7
138.1
139.1
139.4
140.1
141.1
141.6
142.6
143.6
144.2
2 Products
3
Final products
4
Consumer goods, total
5
Durable consumer goods
6
Automotive products
7
Autos and trucks
8
Autos, consumer
9
Trucks, consumer
10
Auto parts and allied goods . . . .
Other
11
12
Appliances, televisions, and air
conditioners
13
Carpeting and furniture
14
Miscellaneous home goods
15
Nondurable consumer goods
16
Foods and tobacco
17
Clothing
18
Chemical products
Paper products
19
Energy
20
21
Fuels
22
Residential utilities
60.5
46.3
29.1
6.1
2.6
1.7
.9
.7
.9
3.5
126.5
128.0
116.9
152.6
144.7
151.8
102.6
202.4
133.9
158.6
126.8
128.2
116.8
152.8
145.4
153.2
99.9
207.4
133.6
158.3
126.8
128.3
117.0
154.0
147.4
157.5
101.8
214.2
132.5
158.8
126.9
128.6
116.8
153.4
143.7
148.9
102.4
197.2
135.3
161.1
127.6
129.5
117.6
155.5
150.6
162.9
105.0
221.6
132.8
158.7
127.6
128.5
130.2
118.2
157.4
147.9
155.1
103.9
207.8
136.7
165.0
128.0
129.8
117.6
154.4
146.2
154.3
107.2
203.6
133.8
160.7
128.5
130.3
118.1
155.7
144.4
148.7
99.8
199.0
137.1
164.9
129.7
131.6
118.8
158.9
149.1
155.0
105.4
206.3
139.6
166.6
130.1
131.8
118.7
156.4
145.4
150.7
105.0
198.3
136.9
165.4
130.5
132.2
118.5
156.9
146.0
151.9
103.1
202.3
136.6
165.8
131.2
133.1
119.1
159.3
148.7
156.1
107.4
206.7
137.3
167.9
131.4
133.5
119.0
158.7
148.5
155.4
108.7
204.3
137.6
166.8
1.0
.8
1.6
23.0
10.3
2.4
4.5
2.9
2.9
.8
2.1
324.3
121.7
114.7
108.7
107.3
90.6
121.8
102.3
114.0
111.3
115.0
311.1
121.0
117.2
108.4
107.7
90.2
120.5
100.3
114.7
110.9
116.1
319.0
121.0
116.2
108.4
107.3
90.2
120.2
319.0
122.1
115.4
108.9
106.5
90.1
122.7
103.2
116.6
110.0
119.3
326.3
115.3
109.9
117.4
329.9
124.1
115.9
108.3
106.7
89.2
119.4
102.0
118.6
111.1
121.7
114.4
108.7
106.2
89.9
120.9
104.7
117.6
112.0
119.7
363.1
124.8
114.8
109.3
106.8
89.4
123.1
106.3
114.5
112.4
114.9
348.4
117.4
115.0
109.1
107.3
90.6
126.0
105.1
106.7
110.1
104.3
357.6
123.0
116.7
109.5
107.4
89.1
126.5
103.1
112.0
111.7
111.6
361.6
126.9
116.6
109.7
107.6
89.3
125.8
104.3
113.0
108.4
114.6
362.8
122.6
116.6
110.0
107.9
89.6
125.1
104.5
114.8
111.5
115.8
366.7
123.7
115.9
109.7
107.8
89.2
125.9
103.0
113.4
114.8
112.1
370.3
127.5
116.5
110.0
107.9
89.8
125.6
103.2
115.3
113.1
115.7
369.4
126.8
115.3
110.0
107.8
88.9
125.0
103.8
116.8
114.3
117.5
23
24
25
26
27
28
29
30
31
32
33
Equipment
Business equipment
Information processing and related
Computer and office equipment
Industrial
Transit
Autos and trucks
Other
Defense and space equipment
Oil and gas well drilling
Manufactured homes
17.2
13.2
5.4
1.1
4.0
2.5
1.2
1.3
3.3
.6
.2
148.9
171.6
248.6
840.1
135.3
126.9
131.4
131.4
74.4
106.8
155.2
148.4
171.2
244.3
805.8
135.3
128.9
131.2
134.0
75.2
99.8
161.3
148.3
171.2
248.2
830.2
133.7
128.2
132.2
130.2
74.6
100.1
158.9
149.3
172.6
253.8
851.9
135.4
127.5
131.2
123.8
74.5
102.0
151.5
150.5
173.9
259.9
892.8
133.6
128.1
135.3
123.2
74.7
107.1
151.3
150.2
173.7
261.3
926.9
133.9
124.0
132.0
126.4
73.6
111.3
144.4
151.2
174.8
265.6
950.5
134.9
122.3
133.4
125.1
73.7
115.7
142.6
151.4
175.0
266.7
970.0
134.6
121.2
134.2
127.5
73.0
121.3
139.3
151.8
175.5
270.1
985.6
135.0
118.5
127.8
128.1
72.4
124.3
138.3
154.2
155.0
156.6
158.1
179.4
182.7
180.6
184.8
277.9
281.2
286.0
290.9
1,015.3 1,059.5 1,094.5 1,126.1
138.4
140.1
139.7
140.2
119.9
117.6
117.0
116.9
134.3
134.0
133.9
135.3
126.8
128.6
137.0
141.4
70.6
69.7
69.8
69.3
125.5
129.9
130.6
132.2
135.4
129.6
129.3
125.5
159.4
186.0
296.8
1,156.4
140.1
116.6
136.6
137.4
70.1
139.6
124.5
34
35
36
Intermediate products, total
Construction supplies
Business supplies
14.2
5.3
8.9
122.1
133.4
115.3
122.3
132.9
116.1
121.7
132.6
115.3
121.5
133.2
114.6
121.7
132.9
115.1
122.6
134.1
115.8
123.2
135.4
115.9
122.4
134.3
115.2
123.1
134.9
116.0
123.7
136.4
116.1
124.8
137.5
117.2
125.0
138.6
116.8
125.0
138.7
116.8
124.8
137.9
117.1
37 Materials
Durable goods materials
38
39
Durable consumer parts
40
Equipment parts
41
Other
42
Basic metal materials
Nondurable goods materials
43
44
Textile materials
Paper materials
45
Chemical materials
46
Other
47
Energy materials
48
Primary energy
49
Converted fuel materials
50
39.5
20.8
4.0
7.6
9.2
3.1
8.9
1.1
1.8
3.9
2.1
9.7
6.3
3.3
154.8
198.9
150.7
360.9
131.3
121.8
114.6
101.0
117.0
117.3
113.5
101.7
99.2
107.0
151.7
194.3
148.4
345.0
130.4
119.9
113.8
101.8
115.3
116.0
102.2
98.3
109.9
153.1
197.2
150.5
355.2
130.6
122.6
114.2
101.2
117.7
116.9
112.0
101.6
98.9
106.8
155.0
200.3
153.9
364.6
131.1
122.8
114.5
101.2
116.3
117.7
113.0
102.9
100.2
108.0
154.6
199.9
147.2
369.0
131.6
123.3
114.4
101.1
116.3
117.4
113.2
102.3
100.3
106.1
155.7
202.3
156.0
371.4
131.2
122.1
114.7
100.3
118.6
117.7
112.5
101.8
99.6
106.1
156.8
203.4
153.7
377.5
131.7
123.5
117.4
102.3
118.5
122.0
114.9
101.5
98.8
106.5
158.8
206.7
154.8
386.8
133.4
125.6
119.1
103.3
119.3
125.1
114.9
101.6
100.1
104.1
159.7
208.8
155.0
394.9
134.0
126.3
118.7
100.9
118.5
124.2
116.8
101.4
99.5
104.8
160.5
211.7
156.0
404.9
134.8
126.2
117.0
99.3
117.9
122.1
114.8
101.2
98.3
106.8
161.2
213.1
153.1
418.0
134.1
124.2
117.6
101.9
116.6
124.5
112.7
100.5
96.7
108.2
163.2
217.6
154.8
436.0
134.6
126.3
116.7
102.7
118.4
121.1
113.4
101.1
98.5
106.2
164.9
220.2
153.4
449.5
134.8
127.0
117.1
100.9
119.8
121.7
113.7
102.4
99.5
108.0
166.0
222.6
155.1
460.6
134.3
126.4
116.5
100.2
119.1
121.3
112.8
102.9
99.9
108.7
97.1
95.1
137.0
136.4
136.1
135.6
136.4
135.9
137.3
136.7
137.4
137.1
138.0
137.2
138.9
138.3
139.3
138.7
140.2
139.5
141.0
140.4
141.6
141.1
142.6
142.0
143.6
143.1
144.1
143.6
98.2
27.4
26.2
131.1
115.0
117.3
130.2
114.8
117.0
130.6
114.8
117.2
131.2
115.0
116.6
131.4
115.2
117.7
131.5
115.2
117.1
132.4
116.3
118.7
132.7
115.6
118.8
133.2
116.4
118.8
134.1
116.9
119.5
134.4
117.0
119.1
135.2
116.7
119.1
136.0
117.2
119.6
136.4
117.1
119.3
12.0
176.2
175.7
175.7
177.4
178.3
178.5
179.5
179.7
181.1
184.5
186.0
188.3
190.5
191.7
12.1
29.8
143.8
172.0
144.2
167.4
143.6
169.5
144.4
171.6
144.6
171.3
143.6
173.0
144.0
174.7
143.7
177.4
143.8
178.6
146.8
179.8
146.9
181.0
148.0
183.6
149.2
185.4
149.6
186.7
1
Total index
114.2
101.5
129.1
117.1
153.5
145.5
152.8
105.5
201.9
134.4
159.7
124.1
SPECIAL AGGREGATES
51 Total excluding autos and trucks
52 Total excluding motor vehicles and parts
53 Total excluding computer and office
equipment
54 Consumer goods excluding autos and trucks .
55 Consumer goods excluding energy
56 Business equipment excluding autos and
trucks
57 Business equipment excluding computer and
office equipment
58 Materials excluding energy
Selected Measures
2.13
INDUSTRIAL PRODUCTION
Group
Indexes and Gross Value 1 —Continued
1992
proportion
SIC
code
A45
1999
avg.
May
June
July
Aug.
Feb.r
Sept.
Apr.
May p
Index (1992 = 100)
M A J O R INDUSTRIES
59
Total index
60
61
62
Manufacturing
Primary processing
Advanced processing
79
80
Durable goods
Lumber and products
Furniture and fixtures
Stone, clay, and glass
products
Primary metals
Iron and steel
Raw steel
Nonferrous
Fabricated metal products . .
Industrial machinery and
equipment
Computer and office
equipment
Electrical machinery
Transportation equipment. . .
Motor vehicles and parts .
Autos and light tracks .
Aerospace and
miscellaneous
transportation
equipment
Instruments
Miscellaneous
81
82
83
84
85
86
87
88
89
90
91
Nondurable goods
Foods
Tobacco products
Textile mill products
Apparel products
Paper and products
Printing and publishing . . . .
Chemicals and products . . . .
Petroleum products
Rubber and plastic products .
Leather and products
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
92 Mining
93
Metal
94
Coal
95
Oil and gas extraction
96
Stone and earth minerals
97 Utilities
98
Electric
99
Gas
"
100.0
137.1
136.2
136.6
137.4
137.7
138.1
139.1
139.4
140.1
141.1
141.6
142.6
143.6
144.2
85.4
26.5
58.9
142.3
123.3
151.8
141.0
122.5
150.7
141.4
122.7
151.2
142.0
123.3
151.8
142.5
123.4
152.6
142.9
123.6
153.1
144.2
124.8
154.5
145.0
125.6
155.2
145.6
125.9
155.9
146.7
126.0
157.5
147.2
125.9
158.4
148.3
125.9
160.1
149.3
126.5
161.3
149.7
126.0
162.3
24
25
45.0
2.0
1.4
172.8
121.6
125.5
170.8
123.9
124.4
172.2
122.2
124.4
173.8
121.5
125.7
174.4
120.2
126.4
175.0
119.7
127.9
176.5
120.5
127.0
177.4
119.8
125.2
178.4
121.4
128.6
181.0
122.1
126.9
181.8
121.2
126.8
184.5
119.9
127.6
186.5
119.6
128.0
187.8
119.5
128.1
32
33
331,2
2.1
3.1
1.7
128.5
123.9
120.1
111.4
128.6
127.8
127.4
124.5
110.7
130.8
129.3
128.0
126.2
111.1
130.2
129.6
127.6
115.9
129.6
128.3
125.9
112.4
131.2
129.0
124.9
121.8
132.4
131.1
130.7
124.0
131.4
132.8
131.7
124.2
130.9
132.8
130.8
123.1
131.7
130.9
129.1
118.7
132.3
133.4
132.7
121.1
133.4
133.9
132.5
124.1
132.3
133.4
132.3
124.1
127.2
128.3
130.2
128.6
132.1
128.5
131.4
128.4
134.0
128.8
131.7
129.7
134.1
129.0
135.2
130.8
133.2
130.4
134.3
130.6
135.6
131.2
134.8
130.9
'
331PT
.1
333-6,9
34
1.4
130.5
126.6
123.2
113.3
130.9
5.0
128.7
35
8.0
230.1
228.4
228.2
230.0
231.4
235.5
238.3
239.7
241.8
247.7
252.6
256.9
260.2
261.6
357
36
37
371
371PT
1.8
7.3
9.5
4.9
2.6
1,061.4
390.2
122.4
151.0
137.8
1,021.6
373.3
122.8
150.6
138.3
1,048.2
384.2
123.5
152.9
142.0
1,075.1
399.2
122.9
152.2
135.8
1,123.7
401.3
122.9
152.2
146.8
1,167.5
402.1
123.1
155.6
139.4
1,196.6
412.6
122.3
155.7
140.7
1,222.8
418.1
121.8
155.8
141.0
1,244.6
426.4
120.4
152.7
135.0
1,284.5
443.5
121.7
156.6
141.0
1,342.2
455.6
119.6
153.4
137.7
1,389.1
475.5
120.4
155.6
138.1
1,428.4
491.2
120.2
155.9
142.3
1,466.2
503.8
120.7
157.0
372-6,9
38
39
4.6
5.4
1.3
94.9
116.5
124.7
96.0
116.7
125.5
95.2
117.0
124.5
94.7
117.2
125.2
94.7
117.7
125.2
92.2
117.2
125.1
90.6
118.3
125.0
89.5
118.9
125.0
89.7
119.7
126.4
88.6
118.4
126.9
87.5
117.3
125.5
87.0
117.5
124.8
86.4
117.7
125.2
86.4
118.6
124.6
20
21
22
23
26
27
28
29
30
31
40.4
9.4
1.6
1.8
2.2
3.6
6.7
9.9
1.4
3.5
.3
111.8
110.1
94.3
110.9
90.7
116.2
104.4
117.5
114.7
137.7
69.8
111.9
110.6
95.4
110.9
91.2
114.6
104.1
117.0
114.2
137.4
70.9
111.3
110.0
94.5
110.8
90.7
115.7
103.5
116.3
113.4
136.4
71.3
111.0
108.9
96.0
112.3
89.8
115.0
102.8
115.8
115.1
138.0
69.1
111.5
108.9
94.8
111.7
89.2
115.8
103.6
117.7
114.1
137.6
70.2
111.8
109.6
90.9
110.8
89.0
117.2
104.6
117.4
114.6
139.3
69.5
113.0
110.1
91.9
112.7
89.1
118.0
106.0
119.8
114.5
138.9
68.2
113.6
110.3
93.1
111.4
89.1
118.1
105.7
122.7
112.8
139.3
67.7
113.7
110.0
94.7
110.1
89.1
117.7
105.3
122.9
114.9
141.4
65.4
113.5
109.8
96.7
111.5
89.0
117.1
105.3
121.6
113.2
142.2
68.1
113.8
110.7
94.5
110.8
89.7
116.5
105.7
122.4
115.6
141.2
66.2
113.6
111.2
91.4
111.7
89.4
117.7
105.9
121.0
118.8
140.3
65.0
113.7
111.1
92.7
112.6
89.9
119.2
105.1
121.0
117.6
140.5
64.0
113.4
111.0
92.8
111.6
88.5
118.0
105.5
120.5
118.4
140.0
63.7
10
12
13
14
6.9
.5
1.0
4.8
.6
98.0
97.1
108.1
92.5
124.4
97.4
100.2
106.1
91.8
123.9
97.1
98.9
107.0
91.4
123.3
97.8
96.2
110.0
92.3
120.5
98.5
93.0
110.7
93.2
123.0
98.3
91.4
109.4
93.0
125.5
99.2
94.2
108.8
94.0
126.3
99.7
94.5
110.0
94.5
125.0
99.5
95.2
109.5
94.6
122.4
99.7
95.5
106.3
95.7
120.8
100.0
94.1
101.9
96.2
127.5
101.6
93.3
109.3
96.4
133.0
102.0
93.0
112.0
96.7
131.3
102.3
92.5
110.1
98.0
127.8
491.493PT
492.493PT
7.7
6.2
1.6
115.6
118.2
104.8
116.1
118.4
105.8
117.4
119.6
107.5
119.8
122.6
107.4
117.8
120.0
108.2
117.7
119.8
108.5
115.2
116.9
107.9
110.9
115.8
88.2
113.5
116.9
98.1
114.6
116.0
108.4
115.3
116.0
112.6
113.2
115.9
100.9
116.1
118.5
105.5
117.7
120.7
104.5
80.5
141.7
140.5
140.8
141.4
142.0
142.3
143.6
144.5
145.2
146.2
146.9
148.0
149.0
149.4
83.6
135.3
134.1
134.3
134.8
135.1
135.3
136.5
137.1
137.6
138.5
138.7
139.7
140.4
140.7
1,045.0
1,085.2
1,120.8
142.1
SPECIAL AGGREGATES
100 Manufacturing excluding motor
vehicles and parts
101 Manufacturing excluding
computer and office
equipment
102 Computers, communications
equipment, and
semiconductors
103 Manufacturing excluding
computers and
semiconductors
lOt Manufacturing excluding
computers, communications
equipment, and
semiconductors
5.9
794.1
753.3
780.5
812.1
830.4
843.0
863.9
887.7
908.5
952.4
994.7
81.1
121.6
121.3
121.2
121.3
121.6
121.7
122.6
122.9
123.1
123.6
123.4
123.7
124.0
124.0
79.5
119.3
119.1
118.9
118.9
119.1
119.3
120.1
120.4
120.6
120.9
120.7
120.9
121.1
120.9
Gross value (billions of 1992 dollars, annual rates)
Major Markets
105 Products, total
2,001.9
2,726.1
2,721.9
2,723.6
2,726.1
2,742.0
2,740.2
2,762.6
2,740.0
2,751.5
2,781.7
2,791.9
2,799.9
2,814.5
2,821.0
106 Final
1,552.1
2,101.6
2,095.3
2,100.3
2,102.8
2,118.5
2,112.5
2,132.5
2,115.8
2,122.4
2,147.5
2,152.5
2,160.1
2,173.8
2,181.0
Consumer goods
107
108
Equipment
109 Intermediate
1,049.6
502.5
449.9
1,294.9
808.3
623.3
1,290.1
806.7
625.2
1,295.1
806.7
622.1
1,292.4
812.3
622.0
1,301.3
819.0
622.4
1,297.0
817.5
626.4
1,311.7
822.5
628.9
1,294.7
823.4
623.0
1,301.5
822.9
627.9
1,309.9
840.3
633.0
1,309.9
845.6
638.1
1,309.1
854.5
638.5
1,314.9
862.6
639.5
1,315.2
869.8
638.9
1. Data in this table appear in the Board's G.17 (419) monthly statistical release. The data
are also available on the Board's web site, http://www.federalreserve.gov/releases/gl7. The
latest historical revision of the industrial production index and the capacity utilization rates
was released in November 1999. The recent annual revision is described in an article in the
March 2000 issue of the Bulletin. For a description of the methods of estimating industrial
production and capacity utilization, see "Industrial Production and Capacity Utilization:
Historical Revision and Recent Developments," Federal Reserve Bulletin, vol. 83 (February
1997), pp. 67-92, and the references cited therein. For details about the construction of
individual industrial production series, see "Industrial Production: 1989 Developments and
Historical Revision," Federal Reserve Bulletin, vol. 76 (April 1990), pp. 187-204.
2. Standard industrial classification.
A46
2.14
Domestic Nonfinancial Statistics • August 2000
HOUSING AND CONSTRUCTION
M o n t h l y figures at seasonally adjusted annual rates except as noted
1999
1997
2000
1999
July
Sept.
Aug.
Oct.
Nov.
Dec.
Jan.
Feb.r
Mar.r
Apr.
Private residential real estate activity (thousands of units except as noted)
NEW UNITS
1,441
1,062
379
1,474
1,134
340
833
570
264
1,404
1,120
285
354
1,612
1,188
425
1,617
1,271
346
935
637
297
1,473
1,158
315
374
1,664
1,247
417
1,667
1,335
332
1,022
704
318
1,636
1,308
328
348
1,673
1,263
410
1,704
1,348
356
1,017
702
315
1,619
1,262
357
336
1,658
1,233
425
1,657
1,285
372
1,026
706
320
1,581
1,251
330
340
1,553
1,200
353
1,628
1,290
338
1,021
702
319
1,642
1,307
335
320
1,636
1,204
432
1,636
1,343
293
1,020
706
314
1,608
1,274
334
321
1,678
1,238
440
1,663
1,344
319
1,022
708
314
1,653
1,345
308
316
1,683
1,266
417
1,769
1,441
328
1,025
710
315
1,675
1,340
335
304
1,762
1,317
445
1,744
1,361
383
1,033
712
321
1,599
1,296
303
307
1,661
1,223
438
1,822
1,324
498
1,041
712
329
1,732
1,382
350
291
1,597
1,238
359
1,630
1,327
303
1,031
707
324
1,734
1,382
352
287
1,559
1,164
395
1,656
1,321
335
1,031
704
327
1,668
1,369
299
271
804
287
886
300
907
326
936
306
914
307
848
311
906
314
895
317
916
320
927r
321r
912
308
965
320
909
319
146.0
176.2
152.5
181.9
160.0
195.8
157.9
188.8
154.9
193.3
162.0
194.4
160.0
200.3
172.9
212.4
165.0
203.0
163.0r
200. l r
162.5
199.5
165.0
202.3
161.4
208.0
18 Number sold
4,382
4,970
5,197
5,310
5,300
5,150
4,880
5,150
5,140
4,450
4,760
5,200
4,880
Price of units sold (thousands
of dollars)2
19 Median
20 Average
121.8
150.5
128.4
159.1
133.3
168.3
136.0
171.9
137.4
174.3
134.4
170.2
132.5
167.2
133.2
168.9
133.7
168.8
132.2
168.9
133.7
168.1
134.7
171.5
136.1
173.3
1
2
3
4
5
6
7
8
9
10
11
12
13
Permits authorized
One-family
Two-family or more
Started
One-family
Two-family or more
Under construction at end of period1
One-family
Two-family or more
Completed
One-family
Two-family or more
Mobile homes shipped
Merchant builder activity in
one-family units
14 Number sold
15 Number for sale at end of period'
Price of units sold (thousands
of dollars)2
16 Median
17 Average
EXISTING UNITS (one-family)
Value of new construction (millions of dollars)3
CONSTRUCTION
21 Total put in place
617,877
664,451
706,431
701,961
698,439
698,168
703,447
717,585
731,771
746,204
756,004
761,738
757,259
22 Private
23
Residential
24
Nonresidential
Industrial buildings
25
Commercial buildings
26
21
Other buildings
28
Public utilities and other
474,842
265,908
208,933
31,355
86,190
37,198
54,190
518,987
293,569
225,418
32,308
95,252
39,438
58,421
547,514
321,795
225,720
26,698
103,111
38,774
57,136
545,992
320,350
225,642
26,246
103,355
38,412
57,629
541,793
319,656
222,137
25,703
102,407
37,791
56,236
540,939
320,048
220,891
25,566
102,728
37,727
54,870
544,532
322,876
221,656
25,387
102,746
38,478
55,045
550,018
326,091
223,927
26,136
104,208
37,820
55,763
557,688
330,141
227,547
26,771
104,172
38,735
57,869
565,804
337,230
228,574
25,954
104,207
39,752
58,661
581,807
339,786
242,021
30,267
112,612
42,268
56,874
587,202
343,770
243,432
30,030
113,031
41,716
58,655
583,821
340,062
243,759
30,105
114,443
41,809
57,402
29 Public
Military
30
31
Highway
Conservation and development
32
Other
33
143,035
2,559
44,295
5,576
90,605
145,464
2,588
45,067
5,487
92,322
158,917
2,133
50,495
6,173
100,117
155,969
2,275
47,822
5,820
100,052
156,646
1,682
48,182
6,598
100,184
157,229
1,947
49,031
6,268
99,983
158,915
2,090
47,058
6,283
103,484
167,566
1,961
53,487
6,555
105,563
174,083
2,362
56,887
7,104
107,730
180,401
1,775
63,677
6,629
108,320
174,197
2,860
53,495
7,114
110,728
174,535
2,278
55,225
6,674
110,358
173,438
2,129
54,273
6,078
110,958
1. Not at annual rates.
2. Not seasonally adjusted.
3. Recent data on value of new construction may not be strictly comparable with data for
previous periods because of changes by the Bureau of the Census in its estimating techniques.
For a description of these changes, see Construction Reports (C-30-76-5), issued by the
Census Bureau in July 1976.
SOURCE. Bureau of the Census estimates for all series except (1) mobile homes, which are
private, domestic shipments as reported by the Manufactured Housing Institute and seasonally adjusted by the Census Bureau, and (2) sales and prices of existing units, which are
published by the National Association of Realtors. All back and current figures are available
from the originating agency. Permit authorizations are those reported to the Census Bureau
from 19,000 jurisdictions beginning in 1994.
Selected Measures
2.15
A47
CONSUMER AND PRODUCER PRICES
Percentage changes based on seasonally adjusted data except as noted
Change from 12
months earlier
Change from 3 months earlier
(annual rate)
Item
1999
1999
May
Change from 1 month earlier
Index
level,
May.
20001
2000
2000
2000
May
June
Sept.
Dec.
Mar.
Jan.
Feb.
Mar.
Apr.
May
CONSUMER PRICES2
(1982-84=100)
1 All items
2.1
3.1
2.7
3.9
2.4
5.8
.2
.5
.7
.0
.1
171.3
2 Food
3 Energy items
4 All items less food and energy
Commodities
6
Services
2.1
1.7
2.0
.6
2.7
2.2
14.6
2.4
.7
3.0
1.5
16.5
2.1
1.7
2.3
2.5
26.0
2.5
2.5
2.5
2.2
7.8
1.8
-.6
3.1
1.7
50.5
3.2
.3
4.1
-.1
1.0
.2
-.2
.3
.4
4.6
.2
.0
.3
.1
4.9
.4
.3
.5
.1
-1.9
.2
.2
.2
.5
-1.9
.2
.0
.2
167.3
121.0
180.8
145.5
200.9
1.4
.7
1.6
2.5
.2
3.9
2.6
18.1
1.9
.8
2.5
-.6
22.4
.8
.0
6.8
3.3
37.6
3.8
.3
.9
-2.0
5.9
1.1
1.2
8.6
3.3
59.0
.8
.9
.1
.2
.9
-.4
.1
1.0
.4
5.2
.5
-,lr
1.0
.1
5.8
.1
.1
-.3
1.0
-4.1
.1
.2
.0
-.2
-.5
.2
.1
137.5
138.0
91.5
153.8
138.7
-.8
-1.0
5.1
3.2
5.7
2.8
6.6
3.4
3.6
2.1
9.8
3.9
,5r
.4
.9'
.2
1.0
.4
-.2
.4
-.1
.1
129.2
136.7
-6.2
6.1
-10.7
5.0
37.2
13.0
-7.7
163.8
7.0
3.7
134.4
22.6
-3.6
-27.9
26.2
21.0
91.5
10.2
,7r
4.7r
2.3r
,6r
li.r
,3r
3.5
1.2
-.2
1.7
-6.9
-1.2
-1.8
9.9
-.3
104.6
105.8
148.5
PRODUCER PRICES
(1982=100)
7 Finished goods
8
Consumer foods
9
Consumer energy
10
Other consumer goods
11
Capital equipment
Intermediate materials
12 Excluding foods and feeds
13 Excluding energy
Crude materials
14 Foods
15 Energy
16 Other
1. Not seasonally adjusted.
2. Figures for consumer prices are for all urban consumers and reflect a rental-equivalence
measure of homeownership.
SOURCE. U.S. Department of Labor, Bureau of Labor Statistics.
A48
2.16
Domestic Nonfinancial Statistics • August 2000
GROSS DOMESTIC PRODUCT AND INCOME
B i l l i o n s o f c u r r e n t d o l l a r s e x c e p t a s n o t e d ; q u a r t e r l y d a t a at s e a s o n a l l y a d j u s t e d a n n u a l r a t e s
1999
Account
1997
2000
1999
1998
Ql
Q2
Q3
Q4
Qlr
GROSS DOMESTIC PRODUCT
1 Total
8,300.8
8,759.9
9,256.1
9,072.7
9,146.2
9,297.8
9,507.9
9,697.6
By source
Personal consumption expenditures
Durable goods
Nondurable goods
Services
5,524.4
642.9
1,641.7
3,239.8
5,848.6
698.2
1,708.9
3,441.5
6,257.3
758.6
1,843.1
3,655.6
6,090.8
739.0
1,787.8
3,564.0
6,200.8
751.6
1,824.8
3,624.3
6,303.7
761.8
1,853.9
3,688.0
6,434.1
782.1
1,905.8
3,746.2
6,602.5
818.6
1,957.2
3,826.7
6 Gross private domestic investment
/
Fixed investment
8
Nonresidential
y
Structures
10
Producers' durable equipment
11
Residential structures
1,383.7
1,315.4
986.1
254.1
732.1
329.2
1,531.2
1,460.0
1,091.3
272.8
818.5
368.7
1,622.7
1,578.0
1,166.7
273.4
893.4
411.3
1,594.3
1,543.3
1,139.9
274.7
865.2
403.4
1,585.4
1,567.8
1,155.4
272.5
882.9
412.4
1,635.0
1,594.2
1,181.6
272.1
909.5
412.7
1,675.8
1,606.8
1,190.0
274.1
916.0
416.7
1,719.3
1,685.4
1,259.2
290.1
969.2
426.1
68.3
65.6
71.2
70.9
44.6
41.3
51.0
40.9
17.6
12.8
40.8
40.1
69.1
71.3
34.0
36.3
16
14 Net exports of goods and services
B
Exports
Imports
— 88.3
968.0
1,056.3
-149.6
966.3
1,115.9
-253.9
998.3
1,252.2
-201.6
966.9
1,168.5
-245.8
978.2
1,224.0
-278.2
1,008.5
1,286.6
-290.1
1,039.5
1,329.6
-330.9
1,058.9
1,389.8
17 Government consumption expenditures and gross investment
18
Federal
iy
State and local
1,481.0
537.8
943.2
1,529.7
538.7
991.0
1,630.1
570.6
1.059.4
1,589.1
557.4
1,031.8
1,605.9
561.6
1,044.3
1,637.2
569.8
1,067.4
1,688.0
593.6
1,094.4
1,706.7
579.9
1,126.7
By major type of product
20 Final sales, total
21
Goods .
22
Durable
23
Nondurable
24
Services
25
Structures
8,232.4
3,074.1
1,424.8
1,649.3
4,434.7
723.7
8,688.7
3,239.1
1,528.9
1,710.3
4,664.6
785.1
9,211.5
3,437.5
1,618.7
1,818.8
4,932.0
842.0
9,021.6
3,365.6
1,584.3
1,781.3
4,820.7
835.3
9,128.6
3,406.6
1,601.7
1,804.9
4,885.5
836.5
9,257.0
3,453.2
1,631.1
1,822.2
4,963.7
840.1
9,438.8
3,524.6
1,657.8
1,866.9
5,058.2
856.0
9,663.7
3,634.4
1,729.6
1,904.9
5,138.1
891.1
68.3
35.6
32.8
71.2
39.0
32.3
44.6
25.8
18.9
51.0
24.1
27.0
17.6
6.3
11.4
40.8
23.0
17.8
69.1
49.8
19.2
34.0
23.2
10.8
8,144.8
8,495.7
8,848.2
8,717.6
8,758.3
8,879.8
9,037.2
9,156.7
30 Total
6,635.5
7,038.8
7,496.3
7,339.4
7,428.1
7,527.0
7,690.9
7,828.0
31 Compensation of employees
32
Wages and salaries
33
Government and government enterprises
34
Other
35
Supplement to wages and salaries
36
Employer contributions for social insurance
37
Other labor income
4,675.7
3,884.7
664.4
3,220.3
791.0
290.1
500.9
5,011.2
4,189.5
692.8
3,496.7
821.7
306.0
515.7
5,331.7
4,472.3
726.5
3,745.8
859.4
323.6
535.8
5,217.7
4,371.5
715.8
3,655.7
846.2
318.3
528.0
5,287.1
4,432.6
721.3
3,711.3
854.5
321.5
533.0
5,373.6
4,509.4
730.3
3,779.1
864.2
325.7
538.5
5,448.3
4,575.6
738.5
3,837.1
872.7
329.0
543.7
5,546.2
4,659.8
754.3
3,905.5
886.4
335.9
550.5
578.6
549.1
29.5
606.1
581.0
25.1
658.5
627.3
31.3
639.9
607.5
32.5
655.3
621.2
34.1
654.0
633.0
21.0
685.0
647.4
37.6
685.4
661.7
23.7
2
i
4
5
12
13
Change in business inventories
Nonfarm
26 Change in business inventories
27
Durable goods
28
Nondurable goods
MEMO
29 Total G D P in chained 1996 dollars
NATIONAL INCOME
38 Proprietors' income 1
39
Business and professional 1
40
Farm1
41 Rental income of persons 2
130.2
137.4
145.9
148.6
148.8
139.0
147.3
145.2
42 Corporate profits1
43
Profits before tax3
44
Inventory valuation adjustment
45
Capital consumption adjustment
838.5
795.9
7.4
35.3
848.4
781.9
20.9
45.6
892.7
848.5
-13.0
57.2
886.9
818.1
13.3
55.5
880.5
835.8
-13.6
58.2
884.1
853.8
-26.7
57.0
919.4
886.3
-24.9
58.0
953.9
923.7
-26.7
56.9
46 Net interest
412.5
435.7
467.5
446.3
456.4
476.3
491.0
497.3
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.
3. For after-tax profits, dividends, and the like, see table 1.48.
SOURCE. U.S. Department of Commerce, Survey of Current Business.
Selected Measures
2.17
A49
PERSONAL INCOME AND SAVING
Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates
2000
1999
Account
1997
1998
1999
Ql
Q2
Q3
Qlr
Q4
PERSONAL INCOME AND SAVING
1 Total personal income
6,951.1
7,358.9
7,791.8
7,630.2
7,732.6
7,831.4
7,972.9
8,092.5
7. Wage and salary disbursements
Commodity-producing industries
3
Manufacturing
4
Distributive industries
6
Service industries
Government and government enterprises
7
3,888.9
975.5
718.8
879.1
1,369.8
664.4
4,186.0
1,038.7
757.5
944.6
1,509.9
692.8
4,472.3
1,082.4
779.7
1,005.8
1,657.6
726.5
4,371.5
1,062.9
767.0
986.3
1,606.6
715.8
4,432.6
1,075.1
774.8
997.6
1,638.5
721.3
4,509.4
1,090.2
786.4
1,013.4
1,675.5
730.3
4,575.6
1,101.4
790.7
1,025.8
1,709.9
738.5
4,659.8
1,120.7
798.9
1,042.8
1,742.0
754.3
500.9
578.6
549.1
29.5
130.2
333.4
854.9
962.4
565.8
515.7
606.1
581.0
25.1
137.4
348.3
897.8
983.6
578.1
535.8
658.5
627.3
31.3
145.9
364.3
931.3
1,018.2
596.4
528.0
639.9
607.5
32.5
148.6
356.1
907.4
1,007.8
588.9
533.0
655.3
621.2
34.1
148.8
361.2
920.5
1,013.6
593.0
538.5
654.0
633.0
21.0
139.0
367.0
938.8
1,021.3
599.0
543.7
685.0
647.4
37.6
147.3
373.1
958.5
1,030.2
604.7
550.5
685.4
661.7
23.7
145.2
379.6
972.5
1,047.1
617.7
8 Other labor income
9 Proprietors' income'
Business and professional 1
Farm'
12 Rental income of persons 2
n Dividends
14 Personal interest income
H Transfer payments
Old-age survivors, disability, and health insurance benefits
16
in
n
17
LESS: Personal contributions for social insurance
18 EQUALS: Personal income
298.1
315.9
334.6
328.9
332.3
336.7
340.4
347.6
6,951.1
7,358.9
7,791.8
7,630.2
7,732.6
7,831.4
7,972.9
8,092.5
968.3
1,072.6
1,152.1
1,124.8
1,139.4
1,160.4
1,183.8
1,212.7
5,982.8
6,286.2
6,639.7
6,505.4
6,593.2
6,671.0
6,789.1
6,879.8
LESS: Personal outlays
5,711.7
6,056.6
6,483.3
6,310.3
6,425.2
6,531.5
6,666.3
6,839.2
22 EQUALS: Personal saving
271.1
229.7
156.3
195.1
168.0
139.5
122.8
40.6
30,391.0
20,213.8
21,887.0
31,395.8
20,997.0
22,569.0
32,387.3
21,901.9
23,244.0
32,038.3 r
21,577.7
23,043.0
32,105.0 r
21,790.5 r
23,172.0
32,467.4 r
21,995.2
23,275.0
32,958.4
22,257.1
23,485.0
33,333.5
22,622.3
23,571.0
4.5
3.7
2.4
3.0
2.5
2.1
1.8
.6
27 Gross saving
1,521.3
1,646.0
1,727.1
1,727.8
1,709.5
1,735.6
1,735.8
1,752.9
28 Gross private saving
1,362.0
1,371.2
1,364.7
1,389.4
1,359.3
1,355.7
1,354.3
1,306.5
79 Personal saving
30 Undistributed corporate profits'
31 Corporate inventory valuation adjustment
271.1
266.6
7.4
229.7
259.6
20.9
156.3
268.6
-13.0
195.1
282.5
13.3
168.0
264.5
-13.6
139.5
257.4
-26.7
122.8
270.1
-24.9
40.6
285.2
-26.7
Capital consumption
3? Corporate
33 Noncorporate
578.8
249.8
616.9
261.5
661.1
278.6
640.9
271.0
652.2
274.6
671.6
287.2
679.7
281.6
694.6
286.1
159.3
37.7
86.6
-48.8
121.5
94.0
27.5
274.8
134.3
87.4
46.9
140.5
98.8
41.7
362.5
206.3
90.9
115.4
156.2
105.2
51.0
338.3
187.2
89.6
97.6
151.1
102.4
48.7
350.2
208.3
90.2
118.1
141.9
104.3
37.6
379.9
225.1
91.2
133.8
154.8
106.0
48.9
381.4
204.6
92.4
112.2
176.9
108.1
68.8
446.4
279.7
93.4
186.3
166.7
109.9
56.7
41 Gross investment
1,518.1
1,598.4
1,602.0
1,628.4
1,574.0
1,594.4
1,611.3
1,624.8
47 Gross private domestic investment
43 Gross government investment
44 Net foreign investment
1,383.7
258.1
-123.7
1,531.2
268.7
-201.5
1,622.7
297.9
-318.5
1,594.3
289.8
-255.7
1,585.4
292.2
-303.7
1,635.0
295.7
-336.3
1,675.8
313.7
-378.2
1,719.3
321.1
-415.7
-3.2
-47.6
-125.1
-99.4
-135.5
-141.2
-124.5
-128.1
19
LESS: Personal tax and nontax payments
20 EQUALS: Disposable personal income
21
MEMO
Per capita (chained 1996 dollars)
73 Gross domestic product
7,4 Personal consumption expenditures
25 Disposable personal income
26 Saving rate (percent)
GROSS SAVING
allowances
34 Gross government saving
35
Federal
Consumption of fixed capital
36
Current surplus or deficit ( - ) , national accounts
37
38
State and local
39
Consumption of fixed capital
Current surplus or deficit ( - ) , national accounts
40
45 Statistical discrepancy
1. With inventory valuation and capital consumption adjustments.
2. With capital consumption adjustment.
SOURCE. U.S. Department of Commerce, Survey of Current
Business.
A50
3.10
International Statistics • August 2000
U.S. INTERNATIONAL TRANSACTIONS
Summary
Millions of dollars; quarterly data seasonally adjusted except as noted 1
2000
1999
Item credits or debits
1998
1997
1999
Ql
Q2
Q3
Q4
Ql p
-68,902
-54,177
231,567
-285,744
-4,419
-3,029
14,757
-17,786
-1,390
-10,306
-81,157
-65,290
234,174
-299,464
-4,692
-3,308
13,913
-17,221
-1,384
-11,175
-89,085
-72,588
243,254
-315,842
-5,289
-3,887
16,543
-20,430
-1,402
-11,208
-99,779
-75,496
251,092
— 326,588
-10,391
-8,964
13,218
-22,182
-1,427
-13,892
-102,301
-86,176
255,037
-341,213
-4,200
-2,820
17,687
-20,507
-1,380
-11,925
-220,562
-164,282
933,907
-1,098,189
-12,205
-6,956
59,405
-66,361
-5,249
-44,075
-338,918
-267,548
960,088
-1,227,636
-24,789
-19,186
58,433
-77,619
-5,603
-46,581
68
-429
-365
119
—392
-686
594
-82
12 Change in U.S. official reserve assets (increase, —)
13
Gold
Special drawing rights (SDRs)
14
15
Reserve position in International Monetary Fund
Foreign currencies
16
-1,010
0
-350
-3,575
2,915
-6,784
0
-149
-5,118
-1,517
8,749
0
12
5,485
3,252
4,068
0
563
3
3,502
1,159
0
-190
1,413
-64
1,950
0
-185
2,268
-133
1,572
0
-176
1,801
-53
-554
0
-180
-237
-137
17 Change in U.S. private assets abroad (increase, —)
Bank-reported claims3
18
19
Nonbank-reported claims
20
U.S. purchases of foreign securities, net
U.S. direct investments abroad, net
21
-464,354
—144,822
-120,403
-89,174
-109,955
—285,605
-24,918
-25,041
-102,817
-132,829
-380,951
-61,424
-69,493
-97,882
-152,152
-19,581
27,771
-13,853
8,132
-41,631
-155,726
-42,519
-16,816
-64,579
-31,812
-114,652
-8,799
-24,066
-34,431
-47,356
-90,988
-37,877
-14,758
-7,004
-31,349
-142,647
-45,084
-35,183
-27,535
-34,845
22 Change in foreign official assets in United States (increase, +)
73
U.S. Treasury securities
Other U.S. government obligations
24
25
Other U.S. government liabilities3
Other U.S. liabilities reported by U.S. banks3
26
Other foreign official assets4
27
18,119
-6,690
4,529
-1,798
22,286
-208
-21,684
-9,957
6,332
-3,113
-11,469
-3,477
44,570
12,073
20,350
-3,698
14,937
908
4,708
800
5,993
-1,594
-589
98
-628
-6,708
5,792
-647
1,437
-502
11,881
12,963
1,835
-1,070
-2,032
185
28,609
5,018
6,730
-387
16,121
1,127
20,442
16,198
8,107
-644
-4,150
931
28 Change in foreign private assets in United States (increase, +)
79
U.S. bank-reported liabilities2
30
U.S. nonbank-reported liabilities
Foreign private purchases of U.S. Treasury securities, net
31
3?
U.S. currency flows
33
Foreign purchases of other U.S. securities, net
Foreign direct investments in United States, net
34
733,542
149,026
107,779
146,433
24,782
196,258
109,264
524,321
40,731
9,412
46,155
16,622
218,026
193,375
706,195
67,713
29,411
-21,756
22,407
325,913
282,507
84,260
-14,184
20,188
-8,781
2,440
61,540
23,057
275,007
34,938
8,871
-5,407
3,057
79,067
154,481
195,854
22,629
3,475
9,639
4,697
94,573
60,841
151,077
24,330
-3,123
-17,207
12,213
90,733
44,131
194,566
-6,701
42,035
-9,254
-6,847
133,000
42,333
292
-143,192
617
10,126
-172
-39,108
-143,192
10,126
-39,108
166
-4,838
5,650
-10,488
178
-38,441
662
-39,103
175
-5,437
-9,615
4,178
-691
9,606
3,301
6,305
166
30,410
5,588
24,822
1 Balance on current account
Balance on goods and services
3
Exports
4
5
Income, net
6
Investment, net
Direct
7
8
Portfolio
Compensation of employees
9
Unilateral current transfers, net
10
?.
11 Change in U.S. government assets other than official
reserve assets, net (increase, —)
35 Capital account transactions, net5
36 Discrepancy
Due to seasonal adjustment
37
Before seasonal adjustment
38
MEMO
Changes in official assets
39 U.S. official reserve assets (increase, —)
40 Foreign official assets in United States, excluding line 25
(increase, +)
41 Change in Organization of Petroleum Exporting Countries official
assets in United States (part of line 22)
-143,465
-104,730
938,543
-1,043,273
3,231
8,185
69,220
-61,035
-4,954
-41,966
-1,010
-6,784
8,749
4,068
1,159
1,950
1,572
-554
19,917
—18,571
48,268
6.302
19
12,951
28,996
21,086
12,124
-11,499
968
2,058
1,966
-983
-2,073
5,951
1. Seasonal factors are not calculated for lines 11-16, 18-20, 22-35, and 38—41.
2. Reporting banks included all types of depository institutions as well as some brokers
and dealers.
3. Associated primarily with military sales contracts and other transactions arranged with
or through foreign official agencies.
4. Consists of investments in U.S. corporate stocks and in debt securities of private
corporations and state and local governments.
5. Consists of capital transfers (such as those of accompanying migrants entering or
leaving the country and debt forgiveness) and the acquisition and disposal of nonproduced
nonfinancial assets.
SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis, Survey of Current
Business.
Summary Statistics
3.11
A51
U.S. FOREIGN TRADE 1
Millions of dollars; m o n t h l y data seasonally adjusted
1999r
Item
1997
1998
2000
1999r
Oct.
Nov.
Dec.
Jan.r
Feb.r
Mar.r
Apr.p
1 Goods and services, balance
2
Merchandise
3
Services
-104,731
-196,652
91,921
-166,897
-246,853
79,956
-264,971
-345,559
80,588
-24,910
-31,576
6,666
-25,711
-32,400
6,689
-25,657
-32,255
6,598
-27,425
-34,049
6,624
-28,144
-34,641
6,497
-30,606
-37,148
6,542
-30,438
-36,909
6,471
4 Goods and services, exports
5
Merchandise
6
Services
938,543
679,715
258,828
932,977
670,324
262,653
956,242
684,358
271,884
82,349
59,193
23,156
83,198
59,682
23,516
84,107
61,211
22,896
83,583
60,321
23,262
84,731
60,894
23,837
86,723
62,513
24,210
86,699
62,632
24,067
7 Goods and services, imports
8
Merchandise
9
Services
-1,043,273
-876,366
-166,907
-1,099,875
-917,178
-182,697
-1,221,213
-1,029,917
-191,296
-107,259
-90,769
-16,490
-108,909
-92,082
-16,827
-109,764
-93,466
-16,298
-111,008
-94,370
-16,638
-112,875
-95,535
-17,340
-117,329
-99,661
-17,668
-117,137
-99,541
-17,596
1. Data show monthly values consistent with quarterly figures in the U.S. balance of
payments accounts.
3.12
SOURCE. FT900, U.S. Department of Commerce, Bureau of the Census and Bureau of
Economic Analysis.
U.S. RESERVE ASSETS
Millions of dollars, end of period
2000
1999
Asset
1 Total
2 Gold stock, including Exchange
Stabilization Fund1
3 Special drawing rights2'3
4 Reserve position in International Monetary
Fund2
5 Foreign currencies4
1996
1997
1998
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.
May
Junep
75,090
69,954
81,755
72,318
71,516
69,898
69,309
70,789
66,587
67,160
67,957
11,049
10,312
11,050
10,027
11,041
10,603
11,049
10,326
11,089
10,336
11,048
10,199
11,048
10,277
11,048
10,335
11,048
10,122
11,048
10,310
11,048
10,444
15,435
38,294
18,071
30,809
24,111
36,001
18,707
32,236
17,950
32,182
17,710
30,941
17,578
30,406
17,871
31,535
15,403
30,014
15,373
30,429
15,428
31,037
SDR holdings and reserve positions in the IMF also have been valued on this basis since July
1974.
3. Includes allocations of SDRs by the International Monetary Fund on Jan. 1 of the year
indicated, as follows: 1970—$867 million; 1971—$717 million; 1972—$710 million; 1979—
$1,139 million; 1980—$1,152 million; 1981—$1,093 million; plus net transactions in SDRs.
4. Valued at current market exchange rates.
1. Gold held "under earmark" at Federal Reserve Banks for foreign and international
accounts is not included in the gold stock of the United States; see table 3.13, line 3. Gold
stock is valued at $42.22 per fine troy ounce.
2. Special drawing rights (SDRs) are valued according to a technique adopted by the
International Monetary Fund (IMF) in July 1974. Values are based on a weighted average of
exchange rates for the currencies of member countries. From July 1974 through December
1980, sixteen currencies were used; since January 1981, five currencies have been used. U.S.
3.13
FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS 1
Millions of dollars, end of period
2000
1999
Asset
1996
1997
1998
Nov.
1 Deposits
Held in custody
2 U.S. Treasury securities2
3 Earmarked gold3
Jan.
Feb.
Mar.
Apr.
May
Junep
167
457
167
501
71
82
87
125
142
110
104
638,049
11,197
620,885
10,763
607,574
10,343
629,430
10,015
632,482
9,933
627,326
9,866
631,421
9,771
641,830
9,711
632,216
9,711
623,553
9,711
627,081
9,688
1. Excludes deposits and U.S. Treasury securities held for international and regional
organizations.
2. Marketable U.S. Treasury bills, notes, and bonds and nonmarketable U.S. Treasury
securities, in each case measured at face (not market) value.
Dec.
3. Held in foreign and international accounts and valued at $42.22 per fine troy ounce; not
included in the gold stock of the United States.
A52
3.15
International Statistics • August 2000
SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS
Millions of dollars, end of period
1999
Item
1 Total1
2
3
4
5
6
7
8
9
10
11
12
2000
1998
1997
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr?
776,505
759,928
782,865
779,191
806,046
808,231
812,353r
827,394
834,533
By type
Liabilities reported by banks in the United States
U.S. Treasury bills and certificates3
U.S. Treasury bonds and notes
Marketable
Nonmarketable4
U.S. securities other than U.S. Treasury securities5
135,384
148,301
125,883
134,177
124,523
154,582
122,505
153,465
138,575
156,177
134,510
153,548
130,268r
156,995
134,687
164,781
138,103
157,607
428,004
5,994
58,822
432,127
6,074
61,667
419,629
6,139
77,992
417,304
6,177
79,740
422,266
6,111
82,917
429,029
6,152
84,992
430,806
6,191
88,093
430,237
5,734
91,955
436,640
5,770
96,413
By area
Europe1
Canada
Latin America and Caribbean
Asia
Africa
Other countries
252,289
36,177
96,942
400,144
9,981
7,058
256,026
36,715
79,503
400,631
10,059
3,080
243,412
39,682
73,627
439,811
7,868
4,551
242,587
39,081
70,632
441,070
7,174
4,733
244,805
38,666
73,518
463,434
7,520
4,189
246,022
39,439
71,888
463,561
8,205
5,202
248,792
39,358
71,180
466,087r
7,976r
5,046
249,545
39,846
77,014
474,828
7,979
4,268
249,685
39,501
72,026
486,893
8,024
4,490
1. Includes the Bank for International Settlements.
2. Principally demand deposits, time deposits, bankers acceptances, commercial paper,
negotiable time certificates of deposit, and borrowings under repurchase agreements.
3. Includes nonmarketable certificates of indebtedness and Treasury bills issued to official
institutions of foreign countries.
4. Excludes notes issued to foreign official nonreserve agencies. Includes current value of
zero-coupon Treasury bond issues to foreign governments as follows: Mexico, beginning
March 1988, 20-year maturity issue and beginning March 1990, 30-year maturity issue;
3.16
LIABILITIES TO, AND CLAIMS ON, FOREIGNERS
Payable in Foreign Currencies
Venezuela, beginning December 1990, 30-year maturity issue; Argentina, beginning April
1993, 30-year maturity issue.
5. Debt securities of U.S. government corporations and federally sponsored agencies, and
U.S. corporate stocks and bonds.
SOURCE. Based on U.S. Department of the Treasury data and on data reported to the
department by banks (including Federal Reserve Banks) and securities dealers in the United
States, and on the 1994 benchmark survey of foreign portfolio investment in the United
States.
Reported by Banks in the United States1
Millions of dollars, end of period
1999r
Item
1 Banks' liabilities
2 Banks' claims
3
Deposits
4
Other claims
5 Claims of banks' domestic customers2
1996
103,383
66,018
22,467
43,551
10,978
1. Data on claims exclude foreign currencies held by U.S. monetary authorities.
1997
117,524
83,038
28,661
54,377
8,191
2000
1998
101,125
78,162
45,985
32,177
20,718
June
Sept.
Dec.
Mar.
90,305
59,597
31,452
28,145
23,474
100,112
67,032
32,713
34,319
11,534
88,144
67,355
34,416
32,939
20,826
85,344
63,573
32,804
30,769
21,753
2. Assets owned by customers of the reporting bank located in the United States that
represent claims on foreigners held by reporting banks for the accounts of the domestic
customers.
Bank-Reported Data
3.17
LIABILITIES TO FOREIGNERS
Payable in U.S. dollars
A53
Reported by Banks in the United States1
M i l l i o n s of d o l l a r s , e n d of p e r i o d
1999
Item
1997
1998
2000
1999
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr?
BY HOLDER AND TYPE OF LIABILITY
1 Total, all foreigners
2 Banks' own liabilities
Demand deposits
3
4
Time deposits2
5
Other3
Own foreign offices 4
6
7 Banks' custodial liabilities5
8
U.S. Treasury bills and certificates6
9
Other negotiable and readily transferable
instruments7
10
Other
11 Nonmonetary international and regional organizations8
12
Banks' own liabilities
Demand deposits
13
14
Time deposits2
Other3
15
16
17
18
19
Banks' custodial liabilities5
U.S. Treasury bills and certificates6
Other negotiable and readily transferable
instruments7
Other
20 Official institutions9
21
Banks' own liabilities
22
Demand deposits
23
Time deposits2
24
Other3
25
26
27
28
Banks' custodial liabilities5
U.S. Treasury bills and certificates6
Other negotiable and readily transferable
instruments7
Other
29 Banks 10
30
Banks' own liabilities
31
Unaffiliated foreign banks
32
Demand deposits
33
Time deposits2
Other3
34
35
Own foreign offices 4
36
37
38
39
Banks' custodial liabilities5
U.S. Treasury bills and certificates6
Other negotiable and readily transferable
instruments7
Other
40 Other foreigners
41
Banks' own liabilities
42
Demand deposits
43
Time deposits2
44
Other3
45
46
47
48
Banks' custodial liabilities5
U.S. Treasury bills and certificates6
Other negotiable and readily transferable
instruments7
Other
MEMO
49 Negotiable time certificates of deposit in custody for
foreigners
..
1,283,027
1,347,837
1,413,074
1,377,112
1,422,378
1,413,074
1,413,612
l,407,178 r
1,404,226
1,403,855
882,980
31,344
198,546
168,011
485,079
884,939
29,558
151,761
140,752
562,868
975,791
42,917
167,182
162,485
603,207
932,195
39,452
162,271
155,705
574,767
976,348
42,889
166,483
162,708
604,268
975,791
42,917
167,182
162,485
603,207
981,262
36,558
165,205
174,797
604,702
970,629 r
39,678 r
171,066r
163,872r
596,013 r
958,053
29,793
170,919
161,469
595,872
972,223
31,186
186,632
164,910
589,495
400,047
193,239
462,898
183,494
437,283
185,797
444,917
188,486
446,030
184,675
437,283
185,797
432,350
181,879
436,549
184,604
446,173
195,050
431,632
184,222
93,641
113,167
141,699
137,705
132,575
118,911
131,464
124,967
131,859
129,496
132,575
118,911
129,551
120,920
128,673
123,272
127,630
123,493
125,011
122,399
11,690
11,486
16
5,466
6,004
11,883
10,850
172
5,793
4,885
14,872
13,953
98
10,349
3,506
17,893
17,052
187
8,772
8,093
14,043
13,156
70
7,675
5,411
14,872
13,953
98
10,349
3,506
21,756
20,900
202
9,621
11,077
20,436
19,513r
148
9,251
10,114r
18,311
17,536
71
9,741
7,724
20,068
19,278
58
11,338
7,882
204
69
1,033
636
919
680
841
628
887
658
919
680
856
625
923
704
775
695
790
623
133
2
397
0
233
6
213
0
229
0
233
6
225
6
213
6
71
9
77
90
283,685
102,028
2,314
41,396
58,318
260,060
80,256
3,003
29,506
47,747
294,752
97,373
3,341
28,700
65,332
279,105
79,376
2,314
29,152
47,910
275,970
80,029
2,829
27,009
50,191
294,752
97,373
3,341
28,700
65,332
288,058
82,435
2,645
25,666
54,124
287,263 r
79,652 r
3,306
27,690 r
48,656
299,468
85,634
2,854
30,117
52,663
295,710
87,758
3,509
36,337
47,912
181,657
148,301
179,804
134,177
197,379
156,177
199,729
154,582
195,941
153,465
197,379
156,177
205,623
153,548
207,611
156,995
213,834
164,781
207,952
157,607
33,151
205
44,953
674
41,152
50
44,804
343
42,331
145
41,152
50
51,522
553
50,298
318
48,689
364
50,118
227
815,247
641,447
156,368
16,767
83,433
56,168
485,079
885,336
676,057
113,189
14,071
45,904
53,214
562,868
901,425
729,398
126,191
17,583
48,199
60,409
603,207
877,167
698,718
123,951
17,111
48,693
58,147
574,767
923,780
739,978
135,710
14,402
54,388
66,920
604,268
901,425
729,398
126,191
17,583
48,199
60,409
603,207
901,621
736,931
132,229
12,964
51,218
68,047
604,702
887,476 r
725,301 r
129,288r
12,424
51,518 r
65,346 r
596,013 r
883,267
719,170
123,298
13,930
49,724
59,644
595,872
884,547
723,984
134,489
14,407
57,498
62,584
589,495
173,800
31,915
209,279
35,359
172,027
16,936
178,449
22,203
183,802
19.512
172,027
16,936
164,690
17,582
162,175
14,635
164,097
15,770
160,563
13,993
35,393
106,492
45,332
128,588
45,695
109,396
41,529
114,717
44,889
119,401
45,695
109,396
36,426
110,682
34,629
112,911
35,453
112,874
34,592
111,978
172,405
128,019
12,247
68,251
47,521
190,558
117,776
12,312
70,558
34,906
202,025
135,067
21,895
79,934
33,238
202,947
137,049
19,840
75,654
41,555
208,585
143,185
25,588
77,411
40,186
202,025
135,067
21,895
79,934
33,238
202,177
140,996
20,747
78,700
41,549
212,003 r
146,163r
23,800"
82,607'
39,756 r
203,180
135,713
12,938
81,337
41,438
203,530
141,203
13,212
81,459
46,532
44,386
12,954
72,782
13,322
66,958
12,004
65,898
11,073
65,400
11,040
66,958
12,004
61,181
10,124
65,840
12,270
67,467
13,804
62,327
11,999
24,964
6,468
51,017
8,443
45,495
9,459
44,918
9,907
44,410
9,950
45,495
9,459
41,378
9,679
43,533
10,037
43,417
10,246
40,224
10,104
16,083
27,026
30,345
26,550
28,320
30,345
28,344
27,266
28,056
26,087
1. Reporting banks include all types of depository institutions as well as some brokers and
dealers. Excludes bonds and notes of maturities longer than one year.
2. Excludes negotiable time certificates of deposit, which are included in "Other negotiable and readily transferable instruments."
3. Includes borrowing under repurchase agreements.
4. For U.S. banks, includes amounts owed to own foreign branches and foreign subsidiaries consolidated in quarterly Consolidated Reports of Condition filed with bank regulatory
agencies. For agencies, branches, and majority-owned subsidiaries of foreign banks, consists
principally of amounts owed to the head office or parent foreign bank, and to foreign
branches, agencies, or wholly owned subsidiaries of the head office or parent foreign bank.
5. Financial claims on residents of the United States, other than long-term securities, held
by or through reporting banks for foreign customers.
r
6. Includes nonmarketable certificates of indebtedness and Treasury bills issued to official
institutions of foreign countries.
7. Principally bankers acceptances, commercial paper, and negotiable time certificates of
deposit.
8. Principally the International Bank for Reconstruction and Development, the InterAmerican Development Bank, and the Asian Development Bank. Excludes "holdings of
dollars" of the International Monetary Fund.
9. Foreign central banks, foreign central governments, and the Bank for International
Settlements.
10. Excludes central banks, which are included in "Official institutions."
A54
3.17
International Statistics • August 2000
LIABILITIES TO FOREIGNERS Reported by Banks in the United States 1 —Continued
1999
Item
1997
1998
2000
1999
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.P
AREA
5 0 T o t a l , all f o r e i g n e r s
1,283,027
1,347,837
1,413,074
1,377,112
1,422,378
1,413,074
1,413,612
l,407,178r
1,404,226
1,403,855
51 Foreign countries
1,271,337
1,335,954
1,398,202
1,359,219
1,408,335
1,398,202
1,391,856
l,386,742r
1,385,915
1,383,787
419,672
2,717
41,007
1,514
2,246
46,607
23,737
1,552
11,378
7,385
317
2,262
7,968
18,989
1,628
39,023
4,054
181,904
239
25,145
427,375
3,178
42,818
1,437
1,862
44,616
21,357
2,066
7,103
10,793
710
3,236
2,439
15,781
3,027
50,654
4,286
181,554
233
30,225
448,004
2,789
44,692
2,196
1,658
49,790
24,748
3,748
6,775
8,310
1,327
2,228
5,475
10,426
4,652
65,985
7,842
176,168
286
28,909
442,633
3,299
38,750
2,658
1,269
45,763
25,472
3,322
6,305
13,874
951
1,875
3,713
9,287
5,381
65,966
8,250
177,992
267
28,239
470,893
2,842
41,331
3,197
1,894
50,261
26,530
3,365
5,264
12,775
1,364
2,148
3,655
11,181
5,518
67,025
8,817
195,453
267
28,006
448,004
2,789
44,692
2,196
1,658
49,790
24,748
3,748
6,775
8,310
1,327
2,228
5,475
10,426
4,652
65,985
7,842
176,168
286
28,909
449,970
2,648
42,433
2,510
1,290
48,530
24,097
3,145
6,261
7,271
834
2,034
6,404
12,531
4,673
64,282
6,912
184,457
273
29,385
450,970R
2,997
38,783
2,533
1,479
49,839
24,201
4,000
5,405
7,797
1,169
2,113
7,543
12,130
4,792
61,335
7,714
187,295R
294
29,551
449,599
2,570
36,385
3,235
2,015
43,666
25,176
3,216
5,278
7,617
1,336
2,006
7,360
12,518
5,425
81,934
7,995
168,995
270
32,602
433,581
2,536
32,866
2,601
1,744
45,324
23,710
3,188
4,789
7,319
1,197
1,913
10,065
11,209
5,165
69,198
8,016
168,985
265
33,491
5 2 Europe
53
Austria
54
B e l g i u m and L u x e m b o u r g
55
Denmark
56
Finland
57
France
58
Germany
59
Greece
60
Italy
61
Netherlands
62
Norway
63
Portugal
64
Russia
65
Spain
66
Sweden
67
Switzerland
68
Turkey
69
United Kingdom
70
Yugoslavia 1 1
Other E u r o p e a n d o t h e r f o r m e r U . S . S . R . 1 2
71
7 2 Canada
7 3 L a t i n A m e r i c a and C a r i b b e a n
74
Argentina
75
Bahamas
76
Bermuda
77
Brazil
78
British W e s t I n d i e s
79
Chile
80
Colombia
81
Cuba
82
Ecuador
83
Guatemala
84
Jamaica
85
Mexico
86
Netherlands Antilles
87
Panama
88
Peru
89
Uruguay
90
Venezuela
Other
91
92 Asia
China
93
Mainland
94
Taiwan
95
Hong Kong
96
India
97
Indonesia
98
Israel
99
Japan
100
Korea (South)
101
Philippines
102
Thailand
103
M i d d l e Eastern oil-exporting c o u n t r i e s "
104
Other
105 Africa
106
Egypt
107
Morocco
South Africa
108
109
Zaire
110
Oil-exporting countries14
111
Other
112 Other
113
Australia
114
Other
1 1 5 N o n m o n e t a r y international and r e g i o n a l o r g a n i z a t i o n s
International15
116
117
Latin A m e r i c a n regional16
Other regional17
118
. .
28,341
30,212
34,119
34,995
33,746
34,119
32,965
33,387
36,147
40,563
536,393
20,199
112,217
6,911
31,037
276,418
4,072
3,652
66
2,078
1,494
450
33,972
5,085
4,241
893
2,382
21,601
9,625
554,866
19,014
118,085
6,846
15,815
302,486
5,015
4,624
62
1,572
1,336
577
37,157
5,010
3,864
840
2,486
19,894
10,183
577,599
18,633
134,407
7,877
12,860
312,664
7,008
5,656
75
1,956
1,621
520
30,718
3,997
4,415
1,142
2,386
20,189
11,475
576,142
17,547
134,111
10,902
13,252
311,509
6,559
5,011
72
1,833
1,484
549
32,210
2,696
4,007
958
2,219
19,914
11,309
594,400
15,042
139,179
8,859
14,184
328,052
6,521
4,783
73
1,930
1,577
546
31,189
3,389
3,834
997
2,585
20,311
11,349
577,599
18,633
134,407
7,877
12,860
312,664
7,008
5,656
75
1,956
1,621
520
30,718
3,997
4,415
1,142
2,386
20,189
11,475
599,486
15,333
149,727
9,910
12,230
320,245
6,366
4,438
75
1,985
1,636
540
32,090
4,269
4,042
1,073
2,260
21,517
11,750
596,206
16,327
155,720
9,106
12,785
311,923
6,244
4,304
75
2,035
1,617
571
32,216
3,692
3,737
1,051
2,262
21,297
11,244
593,705
17,906
141,370
10,108
14,889
317,614
5,752
4,314
100
2,141
1,706
671
31,393
4,528
4,157
975
2,377
22,572
11,132
602,198
18,487
159,115
9,710
10,305
312,515
5,933
4,243
77
2,193
1,628
670
32,832
5,067
3,788
1,021
2,431
21,140
11,043
269,379
307,960
319,361
287,963
292,078
319,361
290,432
287,371R
288,103
289,662
18,252
11,840
17,722
4,567
3,554
6,281
143,401
13,060
3,250
6,501
14,959
25,992
13,441
12,708
20,900
5,250
8,282
7,749
168,563
12,524
3,324
7,359
15,609
32,251
12,325
13,595
27,697
7,367
6,567
7,488
159,075
12,840
3,253
6,050
21,280
41,824
10,460
12,023
24,299
5,659
6,037
5,175
151,632
9,935
2,134
4,983
16,825
38,801
13,981
14,791
22,276
5,610
6,486
5,071
152,095
8,474
2,639
5,164
17,944
37,547
12,325
13,595
27,697
7,367
6,567
7,488
159,075
12,840
3,253
6,050
21,280
41,824
11,570
11,677
25,951
5,491
6,853
6,581
149,033
11,573
1,938
5,389
16,923
37,453
11,661
11,211r
24,038
5,405
7,495
7,680
145,314
12,625
2,540R
5,134
15,807
38,461R
8,096
14,642
23,144
6,258
7,837
8,338
145,074
16,420
2,277
4,370
16,127
35,520
8,530
14,488
23,732
5,586
7,275
7,063
147,404
16,820
2,290
3,628
19,001
33,845
10,347
1,663
138
2,158
10
3,060
3,318
8,905
1,339
97
1,522
5
3,088
2,854
9,469
2,022
179
1,495
14
2,915
2,844
8,037
1,364
174
828
14
2,912
2,745
7,799
1,846
166
957
13
2,248
2,569
9,469
2,022
179
1,495
14
2,915
2,844
8,106
1,616
176
730
7
2,953
2,624
8,270R
1,703
262
698
13
3,098R
2,496
8,614
1,770
115
673
13
3,318
2,725
8,576
1,663
106
687
7
3,586
2,527
7,205
6,304
901
6,636
5,495
1,141
9,650
8,377
1,273
9,449
8,199
1,250
9,419
8,394
1,025
9,650
8,377
1,273
10,897
9,910
987
10,538
9,335
1,203
9,747
8,669
1,078
9,207
8,414
793
11,690
10,517
424
749
11,883
10,221
594
1,068
14,872
12,972
650
1,250
17,893
16,009
960
924
14,043
12,710
345
988
14,872
12,972
650
1,250
21,756
19,657
1,128
971
20,436R
17,861 R
1,558
1,017
18,311
16,256
1,244
811
20,068
18,685
518
865
11. S i n c e D e c e m b e r 1 9 9 2 , h a s e x c l u d e d B o s n i a , C r o a t i a , and S l o v e n i a .
12. I n c l u d e s the B a n k f o r I n t e r n a t i o n a l S e t t l e m e n t s . S i n c e D e c e m b e r 1 9 9 2 , h a s
i n c l u d e d all parts o f t h e f o r m e r U . S . S . R . ( e x c e p t R u s s i a ) , and B o s n i a , Croatia, and S l o v e n i a .
13. C o m p r i s e s B a h r a i n , Iran, Iraq, K u w a i t , O m a n , Qatar, S a u d i Arabia, and U n i t e d A r a b
Emirates (Trucial States).
14. C o m p r i s e s A l g e r i a , G a b o n , L i b y a , and N i g e r i a .
15. P r i n c i p a l l y the International B a n k f o r R e c o n s t r u c t i o n and D e v e l o p m e n t . E x c l u d e s
" h o l d i n g s o f d o l l a r s " o f the International M o n e t a r y Fund.
16. P r i n c i p a l l y the I n t e r - A m e r i c a n D e v e l o p m e n t B a n k .
17. A s i a n , A f r i c a n , M i d d l e E a s t e r n , a n d E u r o p e a n r e g i o n a l o r g a n i z a t i o n s , e x c e p t the B a n k
f o r International S e t t l e m e n t s , w h i c h is i n c l u d e d in " O t h e r E u r o p e . "
Bank-Reported Data
3.18
A55
BANKS' OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States1
Payable in U.S. Dollars
Millions of dollars, end of period
1999
Area or country
1997
1998
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.P
779,765
793,421
755,370
750,751r
813,504
815,351
774,100
788,855
749,752
746,084r
809,195
810,349
306,304
3,020
8,898
1,702
2,328
30,051
29,871
793
8,614
10,144
1,243
1,307
701
4,581
4,505
68,904
2,969
119,886
50
6,737
r
361,084
2,493
8,022
1,625
2,093
28,127
35,371
842
7,048
14,222
999
1,043
709
3,187
7,492
111,544
3,053
124,776
50
8,388
349,493
2,429
7,939
1,940
2,087
30,932
33,975
728
7,034
14,054
1,355
1,085
709
3,217
8,100
97,687
3,148
125,439
186
7,449
1 Total, all foreigners
708,225
734,995
793,421
752,319
2 Foreign countries
705,762
731,378
788,855
747,029
3 Europe
4
Austria
5
Belgium and Luxembourg
6
Denmark
7
Finland
8
France
9
Germany
10
Greece
11
Italy
12
Netherlands
Norway
13
Portugal
14
11
Russia
16
Spain
Sweden
17
18
Switzerland
19
Turkey
20
United Kingdom
21
Yugoslavia2
22
Other Europe and other former U.S.S.R.3
199,880
1,354
6,641
980
1,233
16,239
12,676
402
6,230
6,141
555
111
1,248
2,942
1,854
28,846
1,558
103,143
52
7,009
233,321
1,043
7,187
2,383
1,070
15,251
15,923
575
7,284
5,697
827
669
789
5,735
4,223
46,874
1,982
106,349
53
9,407
2000
1999
313,955
2,643
10,193
1,669
2,020
29,142
29,205
806
8,496
10,477
867
1,571
713
3,796
3,213
79,086
2,617
119,829
50
7,562
293,618
2,752
9,624
2,352
1,669
21,533
23,616
743
6,682
8,940
949
1,691
871
4,073
4,325
78,448
2,403
114,209
51
8,687
313,288
2,407
9,332
1,756
2,034
24,592
22,365
754
7,297
8,100
920
1,430
711
4,641
3,853
91,493
2,491
120,836
50
8,226
313,955
2,643
10,193
1,669
2,020
29,142
29,205
806
8,496
10,477
867
1,571
713
3,796
3,213
79,086
2,617
119,829
50
7,562
314,283
2,471
9,777
1,743
1,846
28,303
28,890
683
6,785
ll,617 r
1,013
1,155
743
4,339
5,382r
70,250r
3,031
128,03 l r
50
8,174
27,189
47,037
37,196
35,903
37,060
37,196
36,474
38,541
42,686
43,259
24 Latin America and Caribbean
Argentina
25
76
Bahamas
77
Bermuda
78
Brazil
79
British West Indies
30
Chile
31
Colombia
37
Cuba
33
Ecuador
34
Guatemala
35
Jamaica
36
Mexico
37
Netherlands Antilles
38
Panama
39
Peru
40
Uruguay
41
Venezuela
Other
42
343,730
8,924
89,379
8,782
21,696
145,471
7,913
6,945
0
1,311
886
424
19,428
17,838
4,364
3,491
629
2,129
4,120
342,654
9,552
96,455
5,011
16,184
153,749
8,250
6,507
0
1,400
1,127
239
21,212
6,779
3,584
3,275
1,126
3,089
5,115
353,409
10,167
99,324
8,007
15,706
167,182
6,607
4,529
0
760
1,133
295
17,899
5,982
3,387
2,529
801
3,494
5,607
335,163
10,148
87,083
9,887
14,218
159,171
6,846
4,800
0
792
1,084
319
17,792
7,497
2,917
2,442
778
4,103
5,286
335,356
10,034
87,177
9,449
14,973
158,937
6,591
4,745
0
761
1,090
309
17,924
8,078
3,050
2,507
775
3,587
5,369
353,409
10,167
99,324
8,007
15,706
167,182
6,607
4,529
0
760
1,133
295
17,899
5,982
3,387
2,529
801
3,494
5,607
323,537
9,962
78,641
10,145
15,031
157,469
6,672
4,326
0
692
1,067
298
17,848
6,194
3,067
2,462
709
3,571
5,383
314,839
10,095
68,914
11,771
15,382
156,776
6,224
4,176
0
730
1,170
332
17,489
6,341
2,972
2,414
111
3,524
5,752
323,816
9,845
74,018
7,441
14,981
166,284
6,511
3,937
0
688
1,181
328
16,998
6,385
2,912
2,223
761
3,580
5,743
328,885
9,760
72,312
5,685
16,278
173,907
6,447
3,917
0
662
1,252
325
16,945
6,388
2,844
2,375
714
3,474
5,600
43
125,092
98,607
74,922
73,099
78,454
74,922
73,327
69,074r
72,692
79,024
1,579
922
13,991
2,200
2,651
768
59,549
18,162
1,689
2,259
10,790
10,532
1,261
1,041
9,080
1,440
1,942
1,166
46,713
8,289
1,465
1,807
16,130
8,273
2,090
1,390
5,893
1,738
1,776
1,875
28,636
9,267
1,410
1,518
14,252
5,077
1,998
816
4,740
1,856
1,636
851
28,363
12,441
1,562
1,411
10,667
6,758
2,082
1,495
6,010
1,972
1,681
1,053
30,305
13,262
990
1,433
11,631
6,540
2,090
1,390
5,893
1,738
1,776
1,875
28,636
9,267
1,410
1,518
14,252
5,077
2,221
1,462
5,240
1,616
1,711
1,853
28,597
11,378
1,088
1,155
10,774
6,232
2,726
1,501
4,453
1,802
1,743
1,832
25,559r
12,066
1,058
1,275
10,947
4,112
3,161
925
4,519
1,749
1,817
3,412
27,310
11,466
1,698
1,154
11,612
3,869
4,532
1,080
4,546
1,786
1,821
3,293
31,148
12,209
1,714
1,081
10,765
5,049
56 Africa
57
Egypt
Morocco
58
59
South Africa
60
Zaire
61
Oil-exporting countries5
Other
62
3,530
247
511
805
0
1,212
755
3,122
257
372
643
0
936
914
2,268
258
352
622
24
276
736
2,299
251
439
589
0
253
767
2,473
233
354
873
9
275
729
2,268
258
352
622
24
276
736
2,786
222
299
943
0
494
828
2,453
207
313
889
0
228
816
1,991
243
279
428
0
198
843
2,054
206
300
360
0
394
794
63 Other
Australia
64
Other
65
6,341
5,300
1,041
6,637
6,173
464
7,105
6,824
281
6,947
6,696
251
7,469
7,272
197
7,105
6,824
281
7,324
7,113
211
6,894
6,682
212
6,926
6,674
252
7,634
7,225
409
66 Nonmonetary international and regional organizations6 . . .
2,463
3,617
4,566
5,290
5,665
4,566
5,618
4,667
4,309
5,002
23 Canada
44
45
46
47
48
49
50
51
52
53
54
55
China
Mainland
Taiwan
Hong Kong
India
Indonesia
Israel
Japan
Korea (South)
Philippines
Thailand
Middle Eastern oil-exporting countries4
Other
1. Reporting banks include all types of depository institutions as well as some brokers and
dealers.
2. Since December 1992, has excluded Bosnia, Croatia, and Slovenia.
3. Includes the Bank for International Settlements. Since December 1992, has included all
parts of the former U.S.S.R. (except Russia), and Bosnia, Croatia, and Slovenia.
4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab
Emirates (Trucial States).
5. Comprises Algeria, Gabon, Libya, and Nigeria.
6. Excludes the Bank for International Settlements, which is included in "Other Europe."
A56
3.19
International Statistics • August 2000
BANKS' OWN AND DOMESTIC CUSTOMERS' CLAIMS ON FOREIGNERS
Payable in U.S. Dollars
Reported by Banks in the United States1
Millions of dollars, end of period
2000
1999
Type of claim
1997
1998
1999
Nov.
Oct.
Dec.
Jan.
Feb.r
755,370
42,344
490,010
93,524
24,259
69,265
129,492
750,751
36,541
496,550
87,666
21,275
66,391
129,994
r
Mar.
1
Total
852,852
875,891
943,378r
2
3
4
5
6
7
8
Banks' claims
Foreign public borrowers
Own foreign offices2
Unaffiliated foreign banks
Deposits
Other
All other foreigners
708,225
20,581
431,685
109,230
30,995
78,235
146,729
734,995
23,542
484,535
106,206
27,230
78,976
120,712
793,421
35,213
528,036
101,230
34,320
66,910
128,942
Claims of banks' domestic customers'
Deposits
Negotiable and readily transferable
instruments4
Outstanding collections and other
claims
144,627
73,110
140,896
79,363
149,957R
86,164R
149,957R
86,164R
195,112
127,077
53,967
47,914
51,161r
51,161R
56,032
17,550
13,619
12,632
12,632
12,003
9,624
4,520
4,672
4,672
4,466
33,816
39,978
31,125
9
10
11
12
943,378
752,319
40,948
487,624
97,262
24,865
72,397
126,485
779,765
39,910
511,669
99,497
27,835
71,662
128,689
793,421
35,213
528,036
101,230
34,320
66,910
128,942
Apr?
1,008,616
813,504
34,432
551,832
97,634
24,361
73,273
129,606
815,351
37,245
556,973
91,901
22,399
69,502
129,232
MEMO
13
Customer liability on acceptances
14
Dollar deposits in banks abroad, reported by
nonbanking business enterprises in the
United States5
33,847
31,125
41,544
48,225
53,657
45,383
principally of amounts due from the head office or parent foreign bank, and from foreign
branches, agencies, or wholly owned subsidiaries of the head office or parent foreign bank.
3. Assets held by reporting banks in the accounts of their domestic customers.
4. Principally negotiable time certificates of deposit, bankers acceptances, and commercial
paper.
5. Includes demand and time deposits and negotiable and nonnegotiable certificates of
deposit denominated in U.S. dollars issued by banks abroad.
1. For banks' claims, data are monthly; for claims of banks' domestic customers, data are
for quarter ending with month indicated.
Reporting banks include all types of depository institution as well as some brokers and
dealers.
2. For U.S. banks, includes amounts due from own foreign branches and foreign subsidiaries consolidated in quarterly Consolidated Reports of Condition filed with bank regulatory
agencies. For agencies, branches, and majority-owned subsidiaries of foreign banks, consists
3.20
32,592
BANKS' OWN CLAIMS ON UNAFFILIATED FOREIGNERS
Payable in U.S. Dollars
Reported by Banks in the United States1
Millions of dollars, end of period
1999
Maturity, by borrower and area2
1996
1997
June'
1 Total
2
3
4
5
6
7
8
9
10
11
1?
13
14
15
16
17
18
19
By borrower
Maturity of one year or less
Foreign public borrowers
All other foreigners
Maturity of more than one year
Foreign public borrowers
All other foreigners
By area
Maturity of one year or less
Europe
Canada
Latin America and Caribbean
Asia
Africa
All other3
Maturity of more than one year
Europe
Canada
Latin America and Caribbean
Asia
Africa
Allother 3
258,106
276,550
250,418
Sept.
Dec.r
Mar.p
261,268
270,102r
266,330
261,095
r
211,859
15,411
196,448
46,247
6,790
39,457
205,781
12,081
193,700
70,769
8,499
62,270
186,526
13,671
172,855
63,892
9,839
54,053
186.494
25,354
161,140
74,774
11,704
63,070
196,82 l
22,603
174,218r
73,281r
12,193
61,088r
187,454
22,904
164,550
78,876
12,043
66,833
180,047
21,332
158,715
81,048
12,803
68,245
55,690
8,339
103,254
38,078
1,316
5,182
58,294
9,917
97,207
33,964
2,211
4,188
68,679
10,968
81,766
18,007
1,835
5,271
84,717
6,674
64,879
22,587
1,543
6,094
82,567
8,545
78,102r
20,864r
1,119
5,624
80,843
7,860
69,035
21,820
1,122
6,774
79,673
8,408
62,377
22,510
957
6,122
6,965
2,645
24,943
9,392
1,361
941
13,240
2,525
42,049
10,235
1,236
1,484
14,923
3,140
33,442
10,018
1,232
1,137
18,962
3,292
39.090
10,482
1,105
1,843
18,618
3,192
38,lllr
10,641r
1,087
1,632
22,950
3,191
38,741
11,257
1,065
1,672
23,949
3,134
39,153
12,093
965
1,754
1. Reporting banks include all types of depository institutions as well as some brokers and
dealers.
2000
1998
2. Maturity is time remaining until maturity.
3. Includes nonmonetary international and regional organizations.
Bank-Reported Data
3.21
CLAIMS ON FOREIGN COUNTRIES
A57
Held by U.S. and Foreign Offices of U.S. Banks 1
Billions of dollars, end of period
1999
1998
Area or country
1996
2000
1997
Mar.
June
Sept.
Dec.
Mar.
June
Sept.
Dec.
Mar.p
645.8
721.8
1029.8
1017.2
1071.9
1051.6
992.6
938.5
936.8
935.5
950.0
228.3
11.7
16.6
29.8
16.0
4.0
2.6
5.3
104.7
14.0
23.7
242.8
11.0
15.4
28.6
15.5
6.2
3.3
7.2
113.4
13.7
28.6
250.9
12.0
16.5
27.0
20.8
7.7
4.8
5.9
114.6
14.2
27.3
273.9
14.0
21.7
30.5
21.1
8.6
3.1
7.0
125.9
16.7
25.3
240.0
11.7
20.3
31.4
18.5
8.4
2.1
7.6
100.1
15.9
23.9
217.7
10.7
18.4
30.9
11.5
7.8
2.3
8.5
85.4
16.8
25.4
208.5
15.6
21.6
34.7
17.8
10.7
4.0
7.8
55.9
15.9
24.6
222.2
16.1
20.4
32.1
16.4
13.3
2.6
8.2
73.4
17.1
22.6
205.5
15.7
19.9
37.4
15.0
10.6
3.6
8.8
51.1
17.8
25.6
235.5
14.3
29.0
38.7
18.1
11.0
2.9
10.2
72.8
16.3
22.0
283.6
14.2
27.1
37.3
20.0
17.2
3.9
10.1
112.8
17.5
23.5
13 Other industrialized countries
14
Austria
Denmark
IS
Finland
16
Greece
17
18
Norway
19
Portugal
20
Spain
Turkey
21
22
Other Western Europe
23
South Africa
24
Australia
66.1
1.1
1.5
.8
6.7
8.0
.9
13.3
2.7
4.9
2.0
24.0
65.5
1.5
2.4
1.3
5.1
3.6
.9
12.6
4.5
8.3
2.2
23.1
78.2
1.7
2.1
1.5
6.1
4.0
.8
18.1
4.9
10.2
5.5
23.2
78.7
1.9
2.2
1.4
5.8
3.4
1.4
17.5
6.5
9.9
6.9
21.8
78.5
2.1
3.0
1.6
5.8
3.2
1.1
19.5
5.2
10.4
5.4
21.4
69.0
1.4
2.2
1.4
5.9
3.2
1.4
13.7
4.8
10.4
4.4
20.3
80.1
2.8
3.4
1.5
6.5
3.1
1.4
15.7
5.2
10.2
4.8
25.4
79.7
2.8
2.9
.9
5.9
3.0
1.2
16.6
4.9
10.2
4.7
26.6
71.7
3.0
2.1
.9
6.6
3.8
1.2
15.1
4.7
9.2
4.0
21.1
68.2
3.5
2.6
.9
6.0
3.2
1.0
12.1
4.8
6.8
3.8
23.5
62.6
2.6
1.5
.8
5.7
2.9
1.0
11.3
5.1
8.3
4.8
18.6
75 OPEC2
26
Ecuador
27
Venezuela
78
Indonesia
29
Middle East countries
30
African countries
19.8
1.1
2.4
5.2
10.7
.4
26.0
1.3
2.5
6.7
14.4
1.2
26.0
1.3
3.4
5.6
14.4
1.4
25.5
1.2
3.3
5.1
15.6
.3
26.0
1.2
3.1
4.7
16.1
.8
27.1
1.3
3.2
4.7
17.0
1.0
26.2
1.2
3.5
4.5
16.7
.4
26.1
1.1
3.2
5.0
16.5
.4
30.1
.9
3.0
4.4
21.4
.5
31.4
.8
2.8
4.2
23.0
.5
28.9
.7
3.0
3.9
21.1
.2
1 Total
2 G-10 countries and Switzerland
3
Belgium and Luxembourg
4
France
Germany
5
6
Italy
7
Netherlands
8
Sweden
9
Switzerland
10
United Kingdom
11
Canada
12
Japan
130.3
139.2
149.8
146.1
140.4
143.4
146.7
148.6
142.5
147.3
152.2
32
33
34
35
36
37
38
Latin America
Argentina
Brazil
Chile
Colombia
Mexico
Peru
Other
14.3
20.7
7.0
4.1
16.2
1.6
3.3
18.4
28.6
8.7
3.4
17.4
2.0
4.1
20.0
33.4
9.0
3.3
17.8
2.1
4.0
20.9
30.3
9.1
3.6
18.1
2.2
4.4
22.9
24.0
8.5
3.4
18.7
2.2
4.6
23.1
24.7
8.3
3.2
18.9
2.2
5.4
24.3
24.2
8.6
3.3
19.7
2.2
5.3
22.8
25.1
8.2
3.1
18.5
2.1
5.5
22.1
22.1
7.7
2.7
19.4
1.8
5.5
22.4
26.4
7.4
2.5
18.7
1.7
5.9
21.3
26.9
8.2
2.5
18.3
1.9
6.1
39
40
41
42
43
44
45
46
47
Asia
China
Mainland
Taiwan
India
Israel
Korea (South)
Malaysia
Philippines
Thailand
Other Asia
2.5
10.3
4.3
.5
21.5
6.0
5.8
5.7
4.1
3.2
9.5
4.9
.7
15.6
5.1
5.7
5.4
4.3
4.2
12.1
5.0
.7
16.2
4.5
5.1
5.5
4.2
3.9
11.8
4.9
.9
14.6
4.7
5.4
5.0
3.7
2.8
12.5
5.3
.9
13.1
5.0
4.7
5.3
3.1
3.0
13.3
5.5
1.1
13.7
5.6
5.1
4.7
2.9
5.0
11.8
5.5
1.1
13.7
5.9
5.4
4.5
3.0
5.3
12.6
6.7
2.0
15.3
6.0
5.7
4.2
2.8
3.3
12.3
7.0
1.0
16.0
6.1
5.8
4.0
2.8
3.6
12.0
7.7
1.8
15.1
6.1
6.2
4.1
2.9
4.6
12.6
7.9
3.3
17.3
6.5
5.3
4.3
2.6
48
49
50
51
Africa
Egypt
Morocco
Zaire
Other Africa3
.7
.7
.1
.9
.9
.6
.0
.8
1.0
.6
.0
1.1
1.5
.6
.0
.8
1.7
.5
.0
1.1
1.3
.5
.0
1.0
1.4
.5
.0
1.2
1.4
.5
.0
1.0
1.3
.5
.0
1.0
1.4
.4
.0
1.0
1.4
.3
.0
.9
6.9
3.7
3.2
9.1
5.1
4.0
12.3
7.5
4.7
11.3
6.9
4.4
6.3
2.8
3.5
5.5
2.2
3.3
7.1
2.3
4.8
5.8
2.1
3.7
5.4
2.0
3.4
5.2
1.6
3.6
4.7
1.7
3.0
135.1
20.5
4.5
37.2
26.1
2.0
.1
27.9
16.7
.1
59.6
140.2
24.2
9.8
43.4
14.6
3.1
.1
32.2
12.7
.1
99.1
133.1
32.6
9.1
24.9
14.0
3.2
.1
33.9
15.0
.1
379.7
130.0
28.6
9.4
34.3
10.5
3.3
.1
30.0
13.6
.2
351.7
121.0
30.7
10.4
27.8
6.0
4.0
.2
30.6
11.1
.2
459.9
93.9
35.4
4.6
12.8
2.6
3.9
.1
23.3
11.1
.2
495.1
93.6
32.6
3.9
13.9
2.7
3.9
.1
22.8
13.5
.2
430.4
75.9
20.4
5.7
7.2
1.3
3.9
.1
22.0
15.2
.1
380.2
90.3
29.4
8.2
6.3
9.1
3.9
.2
22.4
10.6
.2
391.2
60.1
13.9
8.0
1.3
1.7
3.9
.1
21.0
10.1
.1
387.9
42.0
2.4
7.3
.0
2.5
3.4
.1
22.2
4.1
.1
376.0
31 Non-OPEC developing countries
52 Eastern Europe
53
Russia4
54
Other
55 Offshore banking centers
56
Bahamas
57
Bermuda
58
Cayman Islands and other British West Indies
59
Netherlands Antilles
60
Panama5
61
Lebanon
62
Hong Kong, China
Singapore
63
Other"
64
65 Miscellaneous and unallocated7
1. The banking offices covered by these data include U.S. offices and foreign branches of
U.S. banks, including U.S. banks that are subsidiaries of foreign banks. Offices not covered
include U.S. agencies and branches of foreign banks. Beginning March 1994, the data include
large foreign subsidiaries of U.S. banks. The data also include other types of U.S. depository
institutions as well as some types of brokers and dealers. To eliminate duplication, the data
are adjusted to exclude the claims on foreign branches held by a U.S. office or another foreign
branch of the same banking institution.
These data are on a gross claims basis and do not necessarily reflect the ultimate country
risk or exposure of U.S. banks. More complete data on the country risk exposure of U.S. banks
are available in the quarterly Country Exposure Lending Survey published by the Federal
Financial Institutions Examination Council.
2. Organization of Petroleum Exporting Countries, shown individually; other members of
OPEC (Algeria, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, and United
Arab Emirates); and Bahrain and Oman (not formally members of OPEC).
3. Excludes Liberia. Beginning March 1994 includes Namibia.
4. As of December 1992, excludes other republics of the former Soviet Union.
5. Includes Canal Zone.
6. Foreign branch claims only.
7. Includes New Zealand, Liberia, and international and regional organizations.
A58
3.22
International Statistics • August 2000
LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in
the United States
Millions of dollars, end of period
1998
Type of liability, and area or country
1996
1997
1999
1998
Sept.
Dec.
Mar.
June
Sept.
Dec.
1 Total
61,782
57,382
46,570
49,279
46,570
46,663
49,337
52,979
53,044r
2 Payable in dollars
3 Payable in foreign currencies
39,542
22,240
41,543
15,839
36,668
9,902
38,410
10,869
36,668
9,902
34,030
12,633
36,032
13,305
36,296
16,683
37,605r
15,415
By type
4 Financial liabilities
5
Payable in dollars
6
Payable in foreign currencies
33,049
11,913
21,136
26,877
12,630
14,247
19,255
10,371
8,884
19,331
9,812
9,519
19,255
10,371
8,884
22,458
11,225
11,233
25,058
13,205
11,853
27,422
12,231
15,191
27,980
13,883
14,097
7 Commercial liabilities
8
Trade payables
9
Advance receipts and other liabilities
28,733
12,720
16,013
30,505
10,904
19,601
27,315
10,978
16,337
29,948
10,276
19,672
27,315
10,978
16,337
24,205
9,999
14,206
24,279
10,935
13,344
25,557
12,651
12,906
25,064r
12,857r
12,207r
10
11
Payable in dollars
Payable in foreign currencies
27,629
1,104
28,913
1,592
26,297
1,018
28,598
1,350
26,297
1,018
22,805
1,400
22,827
1,452
24,065
1,492
23,722r
1,318
12
13
14
15
16
17
18
By area or country
Financial liabilities
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
23,179
632
1,091
1,834
556
699
17,161
18,027
186
1,425
1,958
494
561
11,667
12,589
79
1,097
2,063
1,406
155
5,980
12,905
150
1,457
2,167
417
179
6,610
12,589
79
1,097
2,063
1,406
155
5,980
16,098
50
1,178
1,906
1,337
141
9,729
19,578
70
1,287
1,959
2,104
143
13,097
21,695
50
1,675
1,712
2,066
133
15,096
23,241
31
1,659
1,974
1,996
147
16,521
19
Canada
1,401
2,374
693
389
693
781
320
344
284
20
21
22
23
24
25
26
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
1,668
236
50
78
1,030
17
1
1,386
141
229
143
604
26
1
1,495
7
101
152
957
59
2
1,351
1
73
154
834
23
1
1,495
7
101
152
957
59
2
1,528
1
78
137
1,064
22
2
1,369
1
52
131
944
19
1
1,180
1
26
122
786
28
0
892
1
5
126
492
25
0
27
28
29
Asia
Japan
Middle Eastern oil-exporting countries1
6,423
5,869
25
4,387
4,102
27
3,785
3,612
0
4,005
3,754
0
3,785
3,612
0
3,475
3,337
1
3,217
3,035
2
3,622
3,384
3
3,437
3,142
3
30
31
Africa
Oil-exporting countries2
38
0
60
0
28
0
31
0
28
0
31
2
29
0
31
0
28
0
340
643
665
650
665
545
545
550
98
9,767
479
680
1,002
766
624
4,303
10,228
666
764
1,274
439
375
4,086
10,030
278
920
1,392
429
499
3,697
11,010
623
740
1,408
440
507
4,286
10,030
278
920
1,392
429
499
3,697
8,580
229
654
1,088
361
535
3,008
8,718
189
656
1,143
432
497
2,959
9,265
128
620
1,201
535
593
3,175
9,262r
140
672r
1,131r
507r
626
3,071r
32
33
34
35
36
37
38
39
3
All other
Commercial liabilities
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
40
Canada
1,090
1,175
1,390
1,504
1,390
1,597
1,670
1,753
l,775 r
41
42
43
44
45
46
47
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
2,574
63
297
196
14
665
328
2,176
16
203
220
12
565
261
1,618
14
198
152
10
347
202
1,840
48
168
256
5
511
230
1,618
14
198
152
10
347
202
1,612
11
225
107
7
437
155
1,674
19
180
112
5
490
149
1,957
24
178
120
39
704
182
2,310r
22r
152
145
48
887r
305
48
49
50
Asia
Japan
Middle Eastern oil-exporting countries'
13,422
4,614
2,168
14,966
4,500
3,111
12,342
3,827
2,852
13,539
3,779
3,582
12,342
3,827
2,852
10,428
2,715
2,479
10,039
2,753
2,209
10,428
2,689
2,618
9,886
2,609
2,551
51
52
Africa
Oil-exporting countries2
1,040
532
874
408
794
393
810
372
794
393
727
377
832
392
959
584
950
499
840
1,086
1,141
1,245
1,141
1,261
1,346
1,195
881r
53
3
Other
1. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab
Emirates (Trucial States).
2. Comprises Algeria, Gabon, Libya, and Nigeria.
3. Includes nonmonetary international and regional organizations.
Nonbank-Reported Data
3.23
CLAIMS ON UNAFFILIATED FOREIGNERS
the United States
A59
Reported by Nonbanking Business Enterprises in
Millions of dollars, end of period
1998
Type of claim, and area or country
1996
1997
1999
1998
Sept.
Dec.
Mar.
June
Sept.
Dec.
1 Total
65,897
68,128
77,462
67,976
77,462
69,054
63,884
67,566
76,669r
2 Payable in dollars
3 Payable in foreign currencies
59,156
6,741
62,173
5,955
72,171
5,291
62,034
5,942
72,171
5,291
64,026
5,028
57,006
6,878
60,456
7,110
69, n o 1
7,472r
By type
4 Financial claims
5
Deposits
6
Payable in dollars
7
Payable in foreign currencies
8
Other financial claims
9
Payable in dollars
10
Payable in foreign currencies
37,523
21,624
20,852
772
15,899
12,374
3,525
36,959
22,909
21,060
1,849
14,050
11,806
2,244
46,260
30,199
28,549
1,650
16,061
14,049
2,012
37,262
15,406
13,374
2,032
21,856
19,867
1,989
46,260
30,199
28,549
1,650
16,061
14,049
2,012
38,217
18,686
17,101
1,585
19,531
17,457
2,074
31,957
13,350
11,636
1,714
18,607
14,800
3,807
33,877
15,192
13,240
1,952
18,685
15,718
2,967
40,23 r
18,566r
16,373r
2,193r
21,665
18,593
3,072
11 Commercial claims
12 Trade receivables
13
Advance payments and other claims
28,374
25,751
2,623
31,169
27,536
3,633
31,202
27,202
4,000
30,714
26,330
4,384
31,202
27,202
4,000
30,837
26,724
4,113
31,927
27,791
4,136
33,689
29,397
4,292
36,438r
32,629r
3,809
14
15
Payable in dollars
Payable in foreign currencies
25,930
2,444
29,307
1,862
29,573
1,629
28,793
1,921
29,573
1,629
29,468
1,369
30,570
1,357
31,498
2,191
34,204r
2,207
16
17
18
19
70
71
22
By area or country
Financial claims
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
11,085
185
694
276
493
474
7,922
14,999
406
1,015
427
677
434
10,337
12,294
661
864
304
875
414
7,766
14,473
496
1,140
359
867
409
9,849
12,294
661
864
304
875
414
7,766
12,881
469
913
302
993
530
8,400
13,978
457
1,368
367
997
504
8,631
13,878
574
1,212
549
1,067
559
8,157
13,023r
529
967
504
1,229
643
7,561r
3,442
3,313
2,503
4,090
2,503
3,111
2,828
3,172
2,553r
20,032
1,553
140
1,468
15,536
457
31
15,543
2,308
108
1,313
10,462
537
36
27,714
403
39
835
24,388
1,245
55
15,758
2,105
63
710
10,960
1,122
50
27,714
403
39
835
24,388
1,245
55
18,825
666
41
1,112
14,621
1,583
72
11,486
467
39
1,102
7,393
1,702
71
12,749
755
524
1,265
7,263
1,791
47
18,206r
l,593 r
11
1,476
12,099r
1,798
48
2,221
1,035
22
2,133
823
11
3,027
1,194
9
2,121
928
13
3,027
1,194
9
2,648
942
8
2,801
949
5
3,205
1,250
5
5,457
3,262
21
23
Canada
74
75
76
77
78
7.9
30
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
31
32
33
Japan
Middle Eastern oil-exporting countries'
34
35
Africa
Oil-exporting countries2
174
14
319
15
159
16
157
16
159
16
174
26
228
5
251
12
286r
15
36
All other3
569
652
563
663
563
578
636
622
706
10,443
226
1,644
1,337
562
642
2,946
12,120
328
1,796
1,614
597
554
3,660
13,246
238
2,171
1,822
467
483
4,769
13,029
219
2,098
1,502
463
546
4,681
13,246
238
2,171
1,822
467
483
4,769
12,782
281
2,173
1,599
415
367
4,529
12,961
286
2,094
1,660
389
385
4,615
14,367
289
2,375
1,944
617
714
4,789
37
38
39
40
41
47
43
Commercial claims
Europe
Belgium and Luxembourg
France
Germany
Netherlands
Switzerland
United Kingdom
16,389r
316
2,236r
1,960r
1,429r
610
5,827r
44
Canada
2,165
2,660
2,617
2,291
2,617
2,983
2,855
2,638
2,151'
45
46
47
48
49
50
51
Latin America and Caribbean
Bahamas
Bermuda
Brazil
British West Indies
Mexico
Venezuela
5,276
35
275
1,303
190
1,128
357
5,750
27
244
1,162
109
1,392
576
6,296
24
536
1,024
104
1,545
401
5,773
39
173
1,062
91
1,356
566
6,296
24
536
1,024
104
1,545
401
5,930
10
500
936
117
1,431
361
6,278
21
583
887
127
1,478
384
5,879
29
549
763
157
1,613
365
5,959r
20
390
905r
18 l r
l,678 r
439
Japan
Middle Eastern oil-exporting countries1
8,376
2,003
971
8,713
1,976
1,107
7,192
1,681
1,135
7,190
1,789
967
7,192
1,681
1,135
7,080
1,486
1,286
7,690
1,511
1,465
8,579
1,823
1,479
9,165r
2,074
1,625
746
166
680
119
711
165
740
128
711
165
685
116
738
202
682
221
631
171
1,368
1,246
1,140
1,691
1,140
1,377
1,405
1,544
1,537
57
53
54
55
56
Africa
Oil-exporting countries2
57
Other3
1. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab
Emirates (Trucial States).
2. Comprises Algeria, Gabon, Libya, and Nigeria.
3. Includes nonmonetary international and regional organizations.
A60
3.24
International Statistics • August 2 0 0 0
FOREIGN TRANSACTIONS IN SECURITIES
M i l l i o n s of d o l l a r s
2000
Transaction, and area or country
1998
1999
2000
1999
Jan.Apr.
Nov.
Oct.
Dec.
Jan.
Feb.
Mar.
Apr.p
U.S. corporate securities
STOCKS
1 Foreign purchases
2 Foreign sales
1,574,192
1,524,203
2,340,659
2,233,137
1,269,222
1,203,361
218,983
211,213
240,329
221,911
256,414
247,460
263,947
253,365
293,110
265,365
402,373
378,141
309,792
306,490
3,302
3 Net purchases, or sales (—)
49,989
107,522
65,861
7,770
18,418
8,954
10,582
27,745
24,232
4 Foreign countries
50,369
107,578
65,821
7,796
18,393
8,983
10,540
27,626
24,414
3,241
68,124
5,672
9,195
8,249
5,001
23,952
-4,689
757
-1,449
-12,351
-1,171
639
-662
98,060
3,813
13,410
8,083
5,650
42,902
-335
5,187
-1,068
4,447
5,723
372
915
70,960
3,461
19,021
625
8,506
14,280
1,851
-9,802
6,054
-4,172
-5,768
582
348
7,760
1,020
1,719
159
-1,418
3,836
543
-3,162
-14
2,386
1,695
-23
306
10,695
-369
2,467
1,375
384
3,966
-958
7,746
-1,197
2,350
630
-244
13,283
66
1,587
1,640
1,495
3,080
-940
-4,735
465
752
211
-18
176
15,704
-240
5,633
-281
2,926
2,246
666
-5,190
677
-1,645
-1,603
151
177
24,375
529
5,425
516
4,804
6,685
890
1,989
1,182
-863
-1,115
-2
55
18,594
1,831
4,532
277
-913
4,794
286
4,840
2,125
-1,717
-2,604
205
81
12,287
1,341
3,431
113
1,689
555
9
-11,441
2,070
53
-446
228
35
-380
-56
40
-26
25
-29
42
119
-182
61
19 Foreign purchases
20 Foreign sales
905,782
727,044
856,804
602,109
373,107
276,244
81,301 r
55,120
74,940
50,839
56,928
41,321
79,045 r
58,889
99,605
69,476
106,302
76,979
88,155
70,900
21 Net purchases, or sales ( - )
178,738
254,695
96,863
26,181 r
24,101
15,607
20,156 r
30,129
29,323
17,255
22 Foreign countries
179,081
255,097
96,990
27,045 r
24,172
15,626
20,161 r
30,147
29,422
17,260
23
24
25
26
27
28
29
30
31
32
33
34
35
130,057
3,386
4,369
3,443
4,826
99,637
6,121
23,938
4,997
12,662
8,384
190
1,116
140,674
1,870
7,723
2,446
4,553
106,344
6,043
60,861
1,979
42,842
17,541
1,411
1,287
54,240
1,596
720
253
663
43,555
4,910
22,721
754
13,427
4,876
571
367
14,75 l r
52
1,203
103
360
11,043r
271
6,396
178
4,847
2,081
343
259
11,639
53
1,327
133
429
9,241
1,506
6,652
-506
4,566
2,297
146
169
7,500
269
-228
183
462
6,040
961
4,094
309
2,591
1,437
257
-86
10,083 r
-114
-618
-23
-47
10,324 r
2,133
4,658
-86
2,623 r
677
73
17,063
1,124
702
-97
526
13,478
1,324
9,659
-177
2,545
1,173
-130
-137
19,454
620
348
94
202
15,479
689
3,680
670
4,506
2,010
-11
434
7,640
-34
288
279
-18
4,274
764
4,724
347
3,753
580
35
-3
-343
-402
-127
-864
-71
-19
-5
-18
-99
-5
5 Europe
6
France
7
Germany
8
Netherlands
9
Switzerland
10
United Kingdom
11 Canada
12 Latin America and Caribbean
13 Middle East1
14 Other Asia
15
Japan
16 Africa
17 Other countries
18 Nonmonetary international and
regional organizations
1
BONDS2
Europe
France
Germany
Netherlands
Switzerland
United Kingdom
Canada
Latin America and Caribbean
Middle East1
Other Asia
Japan
Africa
Other countries
36 Nonmonetary international and
regional organizations
1,113 R
Foreign securities
37 Stocks, net purchases, or sales ( - )
38
Foreign purchases
39
Foreign sales
40 Bonds, net purchases, or sales ( - )
41
Foreign purchases
42
Foreign sales
6,227
929,923
923,696
-17,350
1,328,281
1,345,631
15,643
1,177,306
1,161,663
-5,676
798,267
803,943
-15,218
643,284
658,502
-8,121
284,323
292,444
-8,206
96,523
104,729
-1,320
62,533
63,853
3,816
129,534
125,718
-512
59,650
60,162
-1,504
125,956
127,460
3,872
52,227
48,355
1,107
134,949
133,842
-3,502
62,189
65,691
-8,882r
176,938 r
185,820 r
-1,986
74,380
76,366
-8,171
177,087
185,258
-3,431
83,838
87,269
728
154,310
153,582
798
63,916
63,118
-11,123
9,967
-23,339
-9,526
3,304
2,368
-2,395
-10,868r
-11,602
1,526
44 Foreign countries
-10,778
9,682
-23,792
-9,532
3,496
2,210
-2,555
— 10,897 r
-11,701
1,361
45
46
47
48
49
50
51
12,632
-1,901
-13,798
-3,992
-1,742
-1,225
-2,494
59,247
-999
-4,726
-42,961
-43,637
713
-1,592
-8,358
-4,158
-15,121
2,851
3,219
523
471
2,202
315
-1,950
-9,603
-10,006
63
-559
2,238
-1,671
6,403
-4,048
-4,453
160
414
5,001
1,342
524
-4,945
-3,596
535
-247
754
-471
-4,868
1,951
866
99
-20
-4,968r
-1,865
-4,252
-711
-879
183
716
-5,922
-1,400
-701
-4,085
-1,457
384
23
1,778
-422
-5,300
5,696
4,689
-143
-248
-345
285
453
6
-192
158
160
29
99
165
43 Net purchases, or sales (—), of stocks and bonds
Europe
Canada
Latin America and Caribbean
Asia
Japan
Africa
Other countries
52 Nonmonetary international and
regional organizations
....
1. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait, Oman, Qatar,
Saudi Arabia, and United Arab Emirates (Trucial States).
2. Includes state and local government securities and securities of U.S. government
agencies and corporations. Also includes issues of new debt securities sold abroad by U.S.
corporations organized to finance direct investments abroad.
Securities Holdings and Transactions A61
3.25
MARKETABLE U.S. TREASURY BONDS AND NOTES
Foreign Transactions1
Millions of dollars; net purchases, or sales (—) during period
1999
2000
Area or country
1998
2000
1999
Jan.Apr.
Oct.
Nov.
Dec.
Jan.
Feb.
Mar.
Apr.p
1 Total estimated
49,039
-9,953
12,755
-9,733
-3,615
4,642
9,543
5,563
-16,871
14,520
2 Foreign countries
46,570
-10,518
12,740
-9,904
-3,802
4,566
9,578
5,770
-17,092
14,484
23,797
3,805
144
-5,533
1,486
5,240
14,384
4,271
615
-38,228
-81
2,285
2,122
1,699
-1,761
-20,232
-22,260
7,348
-12,832
414
-2,188
4,520
373
-5,072
-7,394
-3,485
1,885
-405
-351
78
130
-6
365
-1,854
1,233
-656
8,643
-357
510
360
369
144
5,837
1,780
-550
-5,533
-798
607
268
317
1,403
-3,481
-3,849
218
214
731
1,706
806
499
-3,407
-450
329
-582
-2,443
65
-866
2,475
-100
-1,382
-1,261
-1,374
8
-9,971
116
-1,352
539
263
5
-5,150
-4,392
640
-632
-498
-1,676
700
-289
-288
-533
1,952
1,819
-3,662
59
9,523
-13,244
27,433
13,048
751
-2,364
-7,523
362
1,661
-9,546
29,359
20,102
-3,021
1,547
2,155
117
-2,693
4,731
21,690
10,772
22
-180
-9,911
25
-1,777
-8,159
942
344
-202
328
-5,417
154
1,362
-6,933
-6,630
-4,378
-680
832
806
-33
576
263
9,718
8,263
-541
-102
-2,409
54
-3,837
1,374
12,403
1,297
-43
-5
6,844
13
2,482
4,349
1,064
-1,874
80
217
-4,789
24
-1,596
-3,217
-2,943
494
-19
-10
2,509
26
258
2,225
11,166
10,855
4
-382
2,469
1,502
199
565
190
666
15
-20
76
171
184
-1
187
125
-4
76
75
1
-35
-7
0
-207
-194
0
221
151
70
36
30
6
46,570
4,123
42,447
-10,518
-9,861
-657
12,740
14,374
-1,634
-9,904
-1,248
-8,656
-3,802
-2,325
-1,477
4,566
4,962
-396
9,578
6,763
2,815
5,770
1,777
3,993
-17,092
-569
-16,523
14,484
6,403
8,081
-16,554
2
2,207
0
4,177
0
201
0
-2,050
0
-3,556
-1
2,913
0
170
0
283
0
811
0
3
4
5
6
7
8
9
10
11
Europe
Belgium and Luxembourg
Germany
Netherlands
Sweden
Switzerland
United Kingdom
Other Europe and former U.S.S.R
Canada
12
13
14
15
16
17
18
19
Latin America and Caribbean
Venezuela
Other Latin America and Caribbean
Netherlands Antilles
Asia
Japan
Africa
Other
20 Nonmonetary international and regional organizations
International
21
22
Latin American regional
MEMO
23 Foreign countries
24
Official institutions
25
Other foreign
Oil-exporting countries
26 Middle East 2
27
1. Official and private transactions in marketable U.S. Treasury securities having an
original maturity of more than one year. Data are based on monthly transactions reports.
Excludes nonmarketable U.S. Treasury bonds and notes held by official institutions of foreign
countries.
2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab
Emirates (Trucial States).
3. Comprises Algeria, Gabon, Libya, and Nigeria,
A62
3.28
International Statistics • August 2000
FOREIGN EXCHANGE RATES A N D INDEXES OF THE FOREIGN EXCHANGE VALUE OF THE U.S. DOLLAR 1
Currency units per U.S. dollar except as noted
2000
Item
1997
1998
1999
Jan.
Feb.
Mar.
Apr.
May
June
Exchange Rates
COUNTRY/CURRENCY UNIT
1
2
3
4
5
6
7
8
9
10
11
12
Australia/dollar2
Austria/schilling
Belgium/franc
Brazil/real
Canada/dollar
China, P.R./yuan
Denmark/krone
European Monetary Union/euro3 ..
Finland/markka
France/franc
Germany/deutsche mark
Greece/drachma
13
14
15
16
17
18
19
20
21
22
23
Hong Kong/dollar
India/rupee
Ireland/pound2
Italy/lira
Japan/yen
Malaysia/ringgit
Mexico/peso
Netherlands/guilder
New Zealand/dollar2
Norway/krone
Portugal/escudo
24
25
26
27
28
29
30
31
32
33
34
Singapore/dollar
South Africa/rand
South Korea/won
Spain/peseta
Sri Lanka/rupee
Sweden/krona
Switzerland/franc
Taiwan/dollar
Thailand/baht
United Kingdom/pound2
Venezuela/bolivar
74.37
12.206
35.81
1.0779
1.3849
8.3193
6.6092
n.a.
5.1956
5.8393
1.7348
273.28
62.91
12.379
36.31
1.1605
1.4836
8.3008
6.7030
n.a.
5.3473
5.8995
1.7597
295.70
64.54
n.a.
n.a.
1.8207
1.4858
8.2781
6.9900
1.0653
n.a.
n.a.
n.a.
306.30
65.60
n.a.
n.a.
1.8057
1.4486
8.2792
7.3492
1.0131
n.a.
n.a.
n.a.
326.86
62.78
n.a.
n.a.
1.7765
1.4512
8.2781
7.5725
0.9834
n.a.
n.a.
n.a.
338.87
60.94
n.a.
n.a.
1.7424
1.4608
8.2786
7.7228
0.9643
n.a.
n.a.
n.a.
346.33
59.60
n.a.
n.a.
1.7696
1.4689
8.2793
7.8872
0.9449
n.a.
n.a.
n.a.
355.02
57.84
n.a.
n.a.
1.8278
1.4957
8.2781
8.2329
0.9059
n.a.
n.a.
n.a.
371.63
59.49
n.a.
n.a.
1.8099
1.4770
8.2772
7.8501
0.9505
n.a.
n.a.
n.a.
354.14
7.7431
36.36
151.63
1,703.81
121.06
2.8173
7.918
1.9525
66.25
7.0857
175.44
7.7467
41.36
142.48
1,736.85
130.99
3.9254
9.152
1.9837
53.61
7.5521
180.25
7.7594
43.13
n.a.
n.a.
113.73
3.8000
9.553
n.a.
52.94
7.8071
n.a.
7.7791
43.59
n.a.
n.a.
105.30
3.8000
9.494
n.a.
51.27
8.0241
n.a.
7.7816
43.65
n.a.
n.a.
109.39
3.8000
9.427
n.a.
49.03
8.2374
n.a.
7.7848
43.64
n.a.
n.a.
106.31
3.8000
9.289
n.a.
49.02
8.4100
n.a.
7.7880
43.68
n.a.
n.a.
105.63
3.8000
9.394
n.a.
49.60
8.6272
n.a.
7.7907
44.08
n.a.
n.a.
108.32
3.8000
9.506
n.a.
47.08
9.0533
n.a.
7.7934
44.76
n.a.
n.a.
106.13
3.8000
9.834
n.a.
47.05
8.6807
n.a.
1.4857
4.6072
947.65
146.53
59.026
7.6446
1.4514
28.775
31.072
163.76
488.87
1.6722
5.5417
1,400.40
149.41
65.006
7.9522
1.4506
33.547
41.262
165.73
548.39
1.6951
6.1191
1,189.84
n.a.
70.868
8.2740
1.5045
32.322
37.887
161.72
606.82
1.6757
6.1309
1,130.99
n.a.
73.140
8.4918
1.5903
30.890
37.380
164.04
652.81
1.7028
6.3209
1,129.75
n.a.
73.552
8.6480
1.6348
30.806
37.759
160.00
659.44
1.7153
6.4675
1,116.39
n.a.
73.810
8.6971
1.6636
30.724
37.923
157.99
666.82
1.7096
6.6480
1,110.32
n.a.
74.123
8.7486
1.6657
30.520
37.993
158.23
672.73
1.7286
7.0238
1,119.49
n.a.
74.867
9.0925
1.7190
30.772
38.951
150.90
680.00
1.7277
6.9147
1,117.94
n.a.
76.736
8.7471
1.6420
30.831
39.087
150.92
680.96
Indexes4
NOMINAL
35 Broad (January 1997=100)'
36 Major currencies (March 1973= 100)6 . .
37 Other important trading partners (January
1997= 100)7
104.44
91.24
116.48
95.79
116.87
94.07
115.95
93.14
117.44
95.31
117.44
95.64
118.10
96.31
120.70
99.31
119.43
96.74
104.67
126.03
129.94
129.14
129.11
128.54
129.05
130.43
131.62
91.33
92.25
99.36
97.25
98.76
96.75
98.05
96.63
99.34
99.18
100.08
99.91
100.50
100.25
102.75
103.57
101.61
100.86
95.87
108.52
107.74
106.17
105.81
106.60
107.16
108.13
109.03
REAL
38 Broad (March 1973 = 100)5
39 Major currencies (March 1973 = 100)6 . .
40 Other important trading partners (March
1973= 100)7
1. Averages of certified noon buying rates in New York for cable transfers. Data in this
table also appear in the Board's G.5 (405) monthly statistical release. For ordering address,
see inside front cover.
2. U.S. cents per currency unit.
3. As of January 1999, the euro is reported in place of the individual euro area currencies.
By convention, the rate is reported in U.S. dollars per euro. These currency rates can be
derived from the euro rate by using the fixed conversion rates (in currencies per euro) as
shown below:
Euro equals
13.7603
40.3399
5.94573
6.55957
1.95583
.787564
Austrian schillings
Belgian francs
Finnish markkas
French francs
German marks
Irish pounds
1936.27
40.3399
2.20371
200.482
166.386
Italian lire
Luxembourg francs
Netherlands guilders
Portuguese escudos
Spanish pesetas
4. The December 1999 Bulletin contains revised index values resulting from the annual
revision to the trade weights. For more information on the indexes of the foreign exchange
value of the dollar, see Federal Reserve Bulletin, vol. 84 (October 1998), pp. 811-18.
5. Weighted average of the foreign exchange value of the U.S. dollar against the currencies
of a broad group of U.S. trading partners. The weight for each cuiTency is computed as an
average of U.S. bilateral import shares from and export shares to the issuing country and of a
measure of the importance to U.S. exporters of that country's trade in third country markets.
6. Weighted average of the foreign exchange value of the U.S. dollar against a subset of
broad index currencies that circulate widely outside the country of issue. The weight for each
currency is its broad index weight scaled so that the weights of the subset of currencies in the
index sum to one.
7. Weighted average of the foreign exchange value of the U.S. dollar against a subset of
broad index currencies that do not circulate widely outside the country of issue. The weight
for each currency is its broad index weight scaled so that the weights of the subset of
currencies in the index sum to one.
A63
Guide to Statistical Releases and Special Tables
STATISTICAL RELEASES—List
Published Semiannually, with Latest
Bulletin
Reference
Anticipated schedule of release dates for periodic releases
Published Irregularly, with Latest
SPECIAL TABLES—Data
Bulletin
Issue
June 2000
Page
A72
Issue
Page
November
February
May
August
1999
2000
2000
2000
A64
A64
A64
A64
November
February
May
August
1999
2000
2000
2000
A66
A66
A66
A66
November
February
May
August
1999
2000
2000
2000
A72
A72
A72
A72
October 1999
January 2000
August 2000
A64
A64
A76
September 1998
September 1999
A64
A64
September 1998
September 1999
A72
A73
September 1998
September 1999
A76
A76
September 1998
September 1999
A79
A79
Reference
Title and Date
Assets and liabilities of commercial
June 30, 1999
September 30, 1999
December 31, 1999
March 31, 2000
Terms of lending at commercial
August 1999
November 1999
February 2000
May 2000
banks
banks
Assets and liabilities of U.S. branches and agencies
June 30, 1999
September 30, 1999
December 31, 1999
March 31, 2000
of foreign
banks
Pro forma balance sheet and income statements for priced service
June 30, 1999
September 30, 1999
March 31, 2000
Residential
1997
1998
lending reported
Disposition
1997
1998
of applications
Small loans to businesses
1997
1998
Community
1997
1998
development
under the Home Mortgage
for private
mortgage
Disclosure
operations
Act
insurance
and farms
lending reported
under the Community Reinvestment
Act
A64
4.20
Special Tables • August 2000
DOMESTIC AND FOREIGN OFFICES Insured Commercial Bank Assets and Liabilities
Consolidated Report of Condition, March 31, 2000
Millions of dollars except as noted
Banks with foreign offices1
Total
1 Total assets
2 Cash and balances due from depository institutions
3
Cash items in process of collection, unposted debits, and currency and coin
4
Cash items in process of collection and unposted debits
5
Currency and coin
6
Balances due from depository institutions in the United States
7
Balances due from banks in foreign countries and foreign central banks
8
Balances due from Federal Reserve Banks
MEMO
9 Non-interest-bearing balances due from commercial banks in the United States
(included in balances due from depository institutions in the United States)
10 Total securities, held-to-maturity (amortized cost) and available-for-sale (fair value)
11
U.S. Treasury securities
12
U.S. government agency and corporation obligations (excludes mortgage-backed
securities)
13
Issued by U.S. government agencies
14
Issued by U.S. government-sponsored agencies
15
Securities issued by states and political subdivisions in the United States
16
General obligations
17
Revenue obligations
18
Industrial development and similar obligations
19
Mortgage-backed securities (MBS)
20
Pass-through securities
21
Guaranteed by GNMA
22
Issued by FNMA and FHLMC
23
Privately issued
24
Other mortgage-backed securities (includes CMOs, REMICs, and stripped MBS) . . .
25
Issued or guaranteed by FNMA, FHLMC or GNMA
26
Collateralized by MBS issued or guaranteed by FNMA, FHLMC, or GNMA
27
All other mortgage-backed securities
28
Other debt securities
29
Other domestic debt securities
30
Foreign debt securities
31
Equity securities
32
Investments in mutual funds and other equity securities with readily determinable
fair value
33
All other equity securities
34 Federal funds sold and securities purchased under agreements to resell
35 Total loans and lease-financing receivables, gross
36
LESS: Unearned income on loans
37 Total loans and leases (net of unearned income)
38
LESS: Allowance for loan and lease losses
39
LESS: Allocated transfer risk reserves
40 EQUALS: Total loans and leases, net
64
65
66
67
68
69
Total loans and leases, gross, by category
Loans secured by real estate
Construction and land development
Farmland
One- to four-family residential properties
Revolving, open-end loans, extended under lines of credit
All other loans
Multifamily (five or more) residential properties
Nonfarm nonresidential properties
Loans to depository institutions
Commercial banks in the United States
Other depository institutions in the United States
Banks in foreign countries
Loans to finance agricultural production and other loans to farmers
Commercial and industrial loans
U.S. addressees (domicile)
Non-U.S. addressees (domicile)
Acceptances of other banks
U.S. banks
Foreign banks
Loans to individuals for household, family, and other personal expenditures (includes
purchased paper)
Credit cards and related plans
Other (includes single payment and installment)
Obligations (other than securities) of states and political subdivisions in the United States
(includes nonrated industrial development obligations)
All other loans
Loans to foreign governments and official institutions
Other loans
Loans for purchasing and carrying securities
All other loans (excludes consumer loans)
Lease-financing receivables
70
71
72
73
74
75
76
77
Assets held in trading accounts
Premises and fixed assets (including capitalized leases)
Other real estate owned
Investments in unconsolidated subsidiaries and associated companies
Customers' liability on acceptances outstanding
Net due from own foreign offices, Edge Act and agreement subsidiaries, and IBFs
Intangible assets
All other assets
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
Domestic
total
Banks with domestic
offices only2
Total
Domestic
Over 100
Under 100
5,778,480
5,077,514
4,031,504
3,330,538
1,490,406
256,570
316,665
233,193
246,999
121,781
n.a.
n.a.
32,268
80,628
12,322
163,526
118,731
95,390
23,340
25,077
7,470
12,249
57,668
29,742
19,258
10,483
18,648
1,058
8,220
11,999
n.a.
n.a.
13,184
T
n.a.
I
1
T
13,960
4,430
1,038,720
107,204
611,247
72,763
359,339
27,927
68,134
6,513
209,860
4,827
205,033
8 5,915
64,774
23,442
698
455,490
283,858
73,186
207,778
2,894
171,632
120,366
4,070
47,195
138,717
n.a.
38,535
70,863
2,186
68,678
28,915
19,993
8,448
474
301,978
192,633
40,798
150,115
1,720
109,346
75,694
3,045
30,607
110,617
52,172
58,445
26,111
104,656
1,967
102,688
48,330
36,422
11,723
184
140,941
82,777
29,204
52,426
1,147
58,164
40,896
907
16,361
26,276
25,867
409
11,210
34,341
674
33,667
11,670
8,359
3,271
40
12,571
8,449
3,184
5,238
27
4,122
3,777
119
227
1,824
n.a.
n.a.
1,215
12,380
26,155
9,018
17,093
3,081
8,128
281
934
31,574
n.a.
n.a.
n.a.
248,306
203,387
193,124
148,205
43,987
11,195
3,529,307
3,105
3,526,202
58,578
113
3,467,511
3,245,392
2,528
3,242,865
n.a.
n a.
n.a.
2,408,250
1,576
2,406,674
40,384
112
2,366,179
2,124,335
998
2,123,336
n.a.
n a.
n.a.
964,281
1,239
963,041
16,018
1
947,022
156,777
290
156,487
2,176
1
154,310
1,547,198
t
908,452
97,841
n.a.
n.a.
n.a.
43,115
995,291
n.a.
n.a.
1,298
n.a.
n.a.
1,514,854
140,800
32,673
854,144
107,989
746,155
57,021
430,216
81,487
n.a.
n.a.
n.a.
42,378
836,654
n.a.
n.a.
683
n.a.
n.a.
95,937
64,373
10,139
21,425
11,031
796,182
649,951
146,231
1,181
303
877
876,109
75,326
6,138
547,505
77,728
469,778
31,974
215,165
79,583
64,090
9,947
5,545
10,293
637,544
628,672
3,873
565
294
272
547,744
57,719
15,409
262,890
28,069
234,821
23,030
188,695
1,826
1,466
198
163
17,082
171,668
170,850
818
108
n.a.
n.a.
91,002
7,755
11,126
43,748
2,192
41,556
2,017
26,357
77
n.a.
n.a.
n.a.
15,002
27,442
n.a.
n.a.
10
n.a.
n.a.
539,023
195,254
343,769
497,047
n.a.
n.a.
315,926
111,508
204,417
273,950
n.a.
n.a.
201,985
82,926
119,060
21,112
821
20,292
20,107
136,333
n.a.
n.a.
n.a.
n.a.
149,101
20,107
108,249
n.a.
n.a.
n.a.
n.a.
143,933
13,224
128,271
7,000
121,271
n.a.
n.a.
138,047
13,224
100,187
1,454
9 8,733
23,786
74,946
132,879
6,140
7,315
19
7,297
1,489
5,808
10,412
743
747
n.a.
n.a.
n.a.
n.a.
642
281,570
73,210
3,012
9,530
9,366
n.a.
9 8,120
232,470
4
T
n.a.
1
1
21,214
n.a.
n.a.
280,913
45,573
1,588
9,065
9,138
n.a.
82,594
185,085
654
22,610
1,141
417
224
n.a.
14,659
42,686
1
5,028
284
47
4
n.a.
867
4,699
1
n.a.
T1
n.a.
1
1
i
T
n.a.
I
21,214
n.a.
n.a.
Commercial Banks
4.20
A65
DOMESTIC AND FOREIGN OFFICES Insured Commercial Bank Assets and Liabilities—Continued
Consolidated Report of Condition, March 31, 2000
M i l l i o n s of dollars e x c e p t as n o t e d
Banks with foreign offices 1
Total
Domestic
total
Total
Domestic
Banks with domestic
offices only 2
Over 100
Under 101
78 Total liabilities, limited-life preferred stock, and equity capital
5,778,480
n.a.
4,031,504
n.a.
1,490,406
256,570
79 Total liabilities
5,295,958
4,594,992
3,709,902
3,008,936
1,356,483
229,573
80 Total deposits
81
Individuals, partnerships, and corporations
82
U.S. government
83
States and political subdivisions in the United States
84
Commercial banks in the United States
85
Other depository institutions in the United States
86
Foreign banks, governments, and official institutions
87
Banks
88
Governments and official institutions
89
Certified and official checks
,84 5,655
5,445,150
n a.
n.a.
83,473
n.a.
128,994
n.a.
n a.
17,818
3,209,380
2,989,799
7,285
144,986
33,025
9,267
8,451
n.a.
n.a.
16,568
2,546,131
2,243,734
n.a.
n.a.
76,635
n.a.
128,672
93,095
35,577
10,059
1,906,856
1,788,383
6,341
64,747
26,186
4,260
8,130
7,030
1,100
8,808
1,084,294
1,004,882
824
62,305
5,911
3,771
314
304
10
6,285
218,230
196,534
120
17,933
927
1,236
7
n a.
n.a.
1,474
662,388
566,754
1,810
43,636
23,400
3,157
7,063
n.a.
n.a.
16,568
376,272
316,548
1,453
20,746
19,521
2,426
6,769
6,213
556
8,808
223,741195,825
312
16,750
3,626
654
288
278
10
6,285
62,375
54,382
45
6,139
252
77
6
n.a.
n.a.
1,474
511,436
440,838
1,604
18,847
23,380
3,138
7,060
n.a.
n.a.
16,568
331,781
280,163
1,308
12,803
19,507
2,426
6,766
6,213
553
8,808
147,163
131,139
261
4,930
3,622
637
288
278
10
6,285
32,492
29,536
36
1,113
251
75
6
n.a.
n a.
1,474
1,530,584
1,471,836
4,888
44,001
6,665
1,833
1,361
817
544
860,553
809,057
512
45,555
2,285
3,118
26
26
0
155,854
142,151
75
11,794
675
1,159
0
n.a.
n.a.
356,607
33,011
n.a.
298,218
6,793
n.a.
155,703
n.a.
85,206
2,604
94
152,854
224
4,077
n.a.
27,130
3,066
77
5
6,212
4
19
n.a.
1,960
133,923
26,998
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
Total transaction accounts
Individuals, partnerships, and corporations
U.S. government
States and political subdivisions in the United States
Commercial banks in the United States
Other depository institutions in the United States
Foreign banks, governments, and official institutions
Banks
Governments and official institutions
Certified and official checks
Demand deposits (included in total transaction accounts)
Individuals, partnerships, and corporations
U.S. government
States and political subdivisions in the United States
Commercial banks in the United States
Other depository institutions in the United States
Foreign banks, governments, and official institutions
Banks
Governments and official institutions
Certified and official checks
n.a.
Total nontransaction accounts
Individuals, partnerships, and corporations
U.S. government
States and political subdivisions in the United States
Commercial banks in the United States
Other depository institutions in the United States
Foreign banks, governments, and official institutions
Banks
Governments and official institutions
Federal funds purchased and securities sold under agreements to repurchase
Demand notes issued to the U.S. Treasury
Trading liabilities
Other borrowed money
Banks' liability on acceptances executed and outstanding
Notes and debentures subordinated to deposits
Net due to own foreign offices, Edge Act and agreement subsidiaries, and IBFs
All other liabilities
127 Total equity capital
MEMO
128 Trading assets at large banks 4
129
U.S. Treasury securities (domestic offices)
130
U.S. government agency corporation obligations
131
Securities issued by states and political subdivisions in the United States
132
Mortgage-backed securities
133
Other debt securities
134
Other trading assets
135
Trading assets in foreign banks
136
Revaluation gains on interest rate, foreign exchange rate, and other
commodity and equity contracts
137 Total individual retirement (IRA) and Keogh plan accounts
138 Total brokered deposits
139
Fully insured brokered deposits
140
Issued in denominations of less than $100,000
141
Issued in denominations of $100,000, or in denominations greater than $100,000 and
participated out by the broker in shares of $100,000 or less
142 Money market deposit accounts (MMDAs)
143 Other savings deposits (excluding MMDAs)
144 Total time deposits of less than $100,000
145 Total time deposits of $100,000 or more
146 All negotiable order of withdrawal (NOW) accounts
147 Number of banks
NOTE. The notation "n.a." indicates the lesser detail available from banks that don't have
foreign offices, the inapplicability of certain items to banks that have only domestic offices or
the absence of detail on a fully consolidated basis for banks that have foreign offices.
1. All transactions between domestic and foreign offices of a bank are reported in "net due
from" and "net due to" lines. All other lines represent transactions with parties other than the
domestic and foreign offices of each bank. Because these intraoffice transactions are nullified
by consolidation, total assets and total liabilities for the entire bank may not equal the sum of
assets and liabilities respectively of the domestic and foreign offices.
Foreign offices include branches in foreign countries, Puerto Rico, and U.S. territories and
possessions; subsidiaries in foreign countries; all offices of Edge Act and agreement corporations wherever located; and IBFs.
2. "Over 100" refers to banks whose assets, on June 30 of the preceding calendar year,
n a.
2,546,992
2,423,044
5,474
101,350
9,625
6,110
1,387
n.a.
n.a.
471,777
35,692
197,122
49 i,389
9,502
78,292
n.a.
156,529
482,522
281,357
n.a.
163,209
65,987
n a.
,494
444,878
35,692
n.a.
457,284
7,021
n.a.
155,703
n.a.
n.a.
383,506
33,011
197,023
339,323
9,274
74,195
n.a.
127,440
321,601
118,148
18,170
4,163
1,284
4,747
14,374
9,423
0
280,885
65,987
147,884
108,351
76,619
12,702
65,870
63,917
868,773
432,999
755,203
490,017
148,692
n a.
8,494
n.a.
163,209
154
n.a.
117,676
18,155
4,076
1,264
4,645
14,374
9,291
0
472
15
87
20
101
0
132
0
65,870
79,754
64,377
36,540
4,683
117
57,167
42,344
38,611
7,063
10,963
1,630
1,467
957
31,857
614,652
270,103
359,690
286,138
44,166
31,548
228,968
142,617
316,620
172,347
75,274
511
25,152
20,278
78,892
31,532
29,252
3,109
5,231
n.a.
n.a.
were $100 million or more. (These banks file the FFIEC 032 or FFIEC 033 Call Report.)
"Under 100" refers to banks whose assets, on June 30 of the preceding calendar year, were
less than $100 million. (These banks file the FFIEC 034 Call Report.)
3. Because the domestic portion of allowances for loan and lease losses and allocated
transfer risk reserves are not reported for banks with foreign offices, the components of total
assets (domestic) do not sum to the actual total (domestic).
4. Components of "Trading assets at large banks" are reported only by banks with either
total assets of $1 billion or more or with $2 billion or more in the par/notional amount of their
off-balance-sheet derivative contracts.
A66
4.23
Special Tables • August 2000
TERMS OF LENDING AT COMMERCIAL BANKS
Survey of Loans Made, May 1-5, 2000
E. Commercial and industrial loans made byU.S.branchesandagenciesofforeignbanks1
Amount of loans (percent)
Weightedaverage
maturity3
Weightedaverage
effective
loan rate
(percent)2
Amount of
loans
(millions
of dollars)
7.78
6.82
7.15
7.97
8.63
134,548
27,790
20,513
38,722
24,608
681
3,303
1,168
585
418
408
367
368
478
364
44.0
60.5
13.9
45.8
39.1
12.1
By maturity/repricing interval6
6 Zero interval
7
Minimal risk
8
Low risk
9
Moderate risk
10
Other
8.92
9.42
7.93
8.80
9.56
27,668
529
2,272
11,187
5,864
382
310
414
381
208
407
709
341
353
631
11 Daily
12
Minimal risk
13
Low risk
14
Moderate risk
15
Other
7.21
6.52
6.94
7.34
7.77
64,053
17,738
10,067
16,798
8,916
1,249
19,725
3,547
1,355
16 2 to 30 days
17
Minimal risk
18
Low risk
19
Moderate risk
20
Other
7.60
7.16
6.98
7.81
8.59
18,757
5,146
3,350
4,392
3,990
21 31 to 365 days
22
Minimal risk
23
Low risk
24
Moderate risk
25
Other
8.04
7.17
7.46
8.10
9.00
17,903
3,523
3,719
4,176
4,816
26 More than 365 days
27
Minimal risk . ..
28
Low risk
29
Moderate risk . .
30
Other
8.37
7.90
6.73
8.74
9.23
5,118
848
964
1,842
851
Average loan
size
(thousands of
dollars)
Subject to
prepayment
penalty
Made under
commitment
12.6
8.9
31.3
84.4
33.9
18.6
7.9
76.6
97.8
81.8
75.5
67.8
55.0
56.6
31.0
61.0
72.1
10.8
62.8
13.5
8.8
21.2
2.2
6.3
10.7
1.7
1.9
69.4
99.8
94.7
93.4
86.6
197
128
254
232
120
45.3
80.0
6.7
31.6
23.6
9.5
.5
12.6
15.8
5.0
41.5
97.0
41.3
20.2
1.9
75.2
99.6
72.8
61.5
45.3
1,104
5,069
2,297
759
538
237
359
158
26.7
21.7
13.2
41.1
30.3
6.6
2.1
17.3
8.9
3.1
46.2
86.0
35.4
40.5
8.6
77.7
93.6
83.0
76.7
61.7
504
962
677
350
721
525
784
366
640
315
34.1
32.5
19.3
49.0
27.2
4.0
.3
5.0
8.4
1.6
30.9
37.8
36.0
34.5
26.1
90.9
96.1
94.0
91.3
60.1
8.4
30.1
81.2
74.8
16.3
41.0
.6
16.3
18.0
12.5
19.5
3.7
22.0
75.2
93.6
92.2
53.1
78.7
Days
Secured by
collateral
LOAN RISK3
1 All commercial and industrial loans
2
Minimal risk
3
Low risk
4
Moderate risk
5
Other
283
787
457
361
202
Weightedaverage risk
rating5
9.5
3.2
6.1
Weightedaverage
maturity/
repricing
interval6
Days
SIZE OF LOAN
(thousands of dollars)
31
32
33
34
1-99
100-999
1,000-9,999
10,000 or more
9.94
9.26
8.30
7.20
3,356
13,562
37,099
80,530
3.3
3.2
3.0
2.3
195
120
105
40
86.1
75.3
28.3
19.9
9.54
6.88
7.06
7.37
7.81
31,988
34,234
13,265
39,432
15,629
3.2
2.7
2.3
1.9
3.0
128
24
36
30
75.1
30.4
8.1
46.1
34.9
16.5
8.6
19.7
2.2
6.9
2.0
6.9
20.5
41.6
75.8
84.3
78.4
74.5
BASE RATE OF LOAN4
35
36
37
38
39
7
Prime
Fed funds
Other domestic
Foreign
Other
Footnotes appear at end of table.
181
1.8
22.3
69.4
57.8
10.8
80.2
56.2
73.9
92.5
76.2
Financial Markets
4.23
TERMS OF LENDING AT COMMERCIAL BANKS
Survey of Loans Made, May 1-5, 2000
B. Commercial and industrial loans made by all domestic banks'
Weightedaverage
effective
loan rate
(percent)2
Amount of
loans
(millions
of dollars)
Average loan
size
(thousands of
dollars)
Amount of loans (percent)
Weightedaverage
maturity3
Days
Subject to
prepayment
penalty
Secured by
collateral
Made under
commitment
LOAN RISK3
6.97
7.19
8.17
8.95
90,036
13,680
13,730
30,811
14,706
474
1,901
827
480
261
566
535
506
602
567
45.8
35.4
By maturity/repricing interval6
6 Zero interval
7
Minimal risk
8
Low risk
9
Moderate risk
10
Other
8.91
9.32
8.01
8.79
9.52
27,119
462
2,144
11,032
5,665
381
324
394
380
204
11 Daily
12
Minimal risk
13
Low risk
14
Moderate risk
15
Other
7.51
6.60
6.96
7.50
8.15
34,979
6,694
6,193
11,072
4,849
16 2 to 30 days
17
Minimal risk
18
Low risk
19
Moderate risk
20
Other
7.62
7.19
7.00
7.94
9.14
21 31 to 365 days
22
Minimal risk
23
Low risk
24
Moderate risk
25
Other
26 More than 365 days
27
Minimal risk .. .
28
Low risk
29
Moderate risk . .
30
Other
1 All commercial and industrial loans
2
Minimal risk
3
Low risk
4
Moderate risk
5
Other
25.7
77.6
42.2
18.8
7.3
78.3
95.7
85.4
52.7
57.1
13.2
5.9
16.4
15.3
14.2
407
709
363
352
632
54.7
51.2
32.7
60.7
71.2
10.8
57.4
14.2
8.9
21.9
2.2
7.2
11.3
1.7
2.0
69.1
99.8
94.4
93.4
87.3
713
9,820
2,461
935
458
355
297
333
376
216
41.7
58.6
10.8
39.5
32.8
16.6
1.3
19.8
22.6
8.3
38.8
96.2
61.0
28.7
2.4
79.4
98.9
82.1
67.0
55.3
12,287
4,185
2,339
3,170
1,645
5,248
1,788
592
236
543
803
333
458
352
30.8
9.3
18.9
53.1
57.3
9.4
2.6
20.9
12.3
7.6
46.0
84.5
38.6
31.4
9.6
86.4
92.3
79.2
87.5
76.8
7.97
6.75
7.43
8.18
8.99
9,812
1,489
1,962
3,369
1,534
298
471
386
297
272
619
314
629
762
489
46.0
15.2
33.3
50.9
70.1
5.6
4.7
9.9
1.7
27.2
9.9
42.8
31.1
41.5
90.4
90.8
89.3
93.0
94.0
8.37
7.89
6.70
8.74
9.23
5,094
843
950
1,842
845
60.0
7.9
29.1
81.2
75.3
16.3
40.6
.7
16.3
18.1
12.5
19.7
3.7
22.0
6.1
75.1
93.6
92.1
53.1
78.5
8.06
282
787
452
361
201
Weightedaverage risk
rating5
20.1
.1
Weightedaverage
maturity/
repricing
interval
Days
SIZE OF LOAN
(thousands of dollars)
31
32
33
34
1-99
100-999
1,000-9,999
10,000 or more
9.95
9.34
8.51
7.31
3,320
12,264
27,796
46,655
3.3
3.3
3.0
2.3
197
129
132
61
86.4
78.0
55.1
28.9
28.4
20.9
10.3
11.8
1.7
4.0
14.7
39.8
75.8
84.1
80.1
75.9
9.50
6.73
6.99
7.74
7.83
29,961
17,356
10,885
17,579
14,256
3.2
2.3
2.3
2.3
2.9
134
41
43
45
195
77.0
39.8
9.8
29.9
34.4
15.5
16.9
24.0
3.6
7.5
1.5
38.3
62.8
42.8
10.6
79.1
62.2
89.0
83.3
82.0
BASE RATE OF LOAN4
35
36
37
38
39
7
Prime
Fed funds
Other domestic
Foreign
Other
Footnotes appear at end of table.
A67
A68
4.23
Special Tables • August 2000
TERMS OF LENDING AT COMMERCIAL BANKS
Survey of Loans Made, May 1-5, 2000
E. Commercial and industrial loans made byU.S.branchesandagenciesofforeignbanks1
Amount of
loans
(millions
of dollars)
7.90
6.93
7.04
8.01
8.78
80,081
13,105
12,543
27,031
12,071
861
9,257
2,835
979
372
499
529
9.53
7.80
8.65
9.41
23,007
379
1,638
9,551
4,370
11 Daily
12
Minimal risk
13
Low risk
14
Moderate risk
15
Other
7.43
6.57
6.92
7.37
8.06
16 2 to 30 days
17
Minimal risk
18
Low risk
19
Moderate risk
20
Other
Average loan
size
(thousands of
dollars)
Amount of loans (percent)
Weightedaverage
maturity3
Weightedaverage
effective
loan rate
(percent)2
Days
Secured by
collateral
Callable
Subject to
prepayment
penalty
Made under
commitment
78.4
98.3
85.9
80.9
75.2
66.5
100.0
95.0
95.7
89.7
LOAN RISK5
1 All commercial and industrial loans
2
Minimal risk
3
Low risk
4
Moderate risk
5
Other
508
484
41.8
33.1
16.3
48.9
50.9
11.8
5.6
15.7
13.4
11.8
27.3
79.4
46.1
18.6
6.7
724
1,061
1,185
767
304
409
755
354
345
670
51.7
54.5
29.7
57.8
67.5
7.3
58.3
4.9
5.4
19.2
13.7
1.5
.9
33,700
6,630
6,065
10,429
4,652
820
18,311
3,754
1,213
528
338
296
326
323
210
40.0
58.2
9.9
36.2
30.3
16.5
1.3
20.2
23.4
7.4
40.1
97.2
62.3
30.3
2.1
79.1
99.8
82.1
65.7
53.9
7.55
7.20
6.89
7.89
9.15
11,072
4,010
2,170
2,647
1,389
1,197
18,561
4,334
1,051
262
576
834
303
516
27.0
5.3
14.2
52.5
55.6
9.1
2.7
21.0
11.0
8.1
46.2
84.6
41.6
27.1
2.9
87.3
95.6
78.3
85.7
78.1
21 31 to 365 days
22
Minimal risk
23
Low risk
24
Moderate risk
25
Other
7.79
6.65
7.25
8.03
8.76
8,355
1,300
1,773
2,879
1,221
1,496
4,273
2,787
1,656
584
618
217
659
807
564
39.6
4.1
28.3
45.9
66.0
3.7
3.9
6.0
1.3
30.0
5.2
47.4
34.2
50.2
94.8
98.3
92.9
96.0
95.4
26 More than 365 days
27
Minimal risk . ..
28
Low risk
29
Moderate risk . .
30
Other
7.73
7.72
3,257
780
760
1,210
301
1,272
5,450
5,859
1,339
334
42.1
.9
17.3
78.8
31.4
10.1
40.5
.3
.4
1.4
6.5
22.6
4.4
3.1
5.4
78.2
99.2
99.7
46.3
89.7
86.3
76.2
51.5
28.6
33.5
19.5
8.0
11.5
1.3
2.4
14.6
39.7
85.5
86.9
79.5
75.9
12.1
.3
39.4
63.6
41.7
11.2
78.5
61.2
89.7
83.6
84.7
6
6
7
8
9
10
By maturity/repricing interval
Zero interval
Minimal risk
Low risk
Moderate risk
Other
6.26
8.44
8.52
Weightedaverage risk
rating5
.0
Weightedaverage
maturity/
repricing
interval
Days
SIZE OF LOAN
(thousands of dollars)
31
32
33
34
1-99
100-999
1,000-9,999
10,000 or more
9.78
9.28
8.42
7.30
1,637
8,676
23,982
45,786
3.5
3.4
3.0
2.3
9.40
6.68
6.97
7.74
7.70
23,793
16,870
10,731
16,147
12,539
3.2
2.3
2.3
2.2
2.9
BASE RATE OF LOAN4
35
36
37
38
39
7
Prime
Fed funds
Other domestic
Foreign
Other
Footnotes appear at end of table.
49
24
38
42
134
75.2
39.2
28.2
27.8
15.8
24.1
3.6
5.9
Financial Markets
4.23
TERMS OF LENDING AT COMMERCIAL BANKS
Survey of Loans Made, May 1-5, 2000
D. Commercial and industrial loans made by small domestic banks 1
Weightedaverage
effective
loan rate
(percent)2
Amount of
loans
(millions
of dollars)
9.31
7.96
9.32
9.75
9,955
575
1,187
3,781
2,635
9.58
8.36
8.66
9.66
9.90
4,113
84
506
1,481
1,295
11 Daily
12
Minimal risk
13
Low risk
14
Moderate risk
15
Other
9.62
9.99
8.66
9.66
10.17
16 2 to 30 days
17
Minimal risk
18
Low risk
19
Moderate risk
20
Other
Average loan
size
(thousands of
dollars)
Amount of loans (percent)
Weightedaverage
maturity3
Days
Subject to
prepayment
penalty
Secured by
collateral
Made under
commitment
LOAN RISK3
78.0
34.7
1,099
699
679
1,240
951
78.0
87.1
59.9
79.7
85.4
24.5
12.9
24.2
28.9
25.2
12.9
38.3
2.2
20.3
10.0
80.3
79.0
104
78
125
392
443
395
398
507
71.7
36.4
42.3
79.3
83.8
30.3
53.4
44.3
31.4
31.0
3.4
3.1
5.6
92.7
78.6
79.4
1,279
64
128
643
197
161
200
142
198
111
773
367
100.0
52.8
93.2
90.9
19.6
1.8
.0
9.6
30.8
2.8
.0
.0
85.4
2.5
84.1
2.5
10.0
89.1
8.21
6.84
8.39
8.23
9.10
1,216
175
169
523
255
191
300
209
184
152
207
78
723
113
139
65.9
99.9
79.4
56.6
66.7
12.0
19.2
18.9
4.7
52.4
44.1
78.2
15.5
90.7
96.8
69.4
21 31 to 365 days
22
Minimal risk
23
Low risk
24
Moderate risk
25
Other
9.02
7.48
9.19
9.03
9.86
1,457
189
189
490
313
53
66
43
51
336
502
204
82.6
91.4
79.5
80.4
86.2
16.2
.6
11.9
32.6
3.5
11.9
39.4
3.7
13.4
7.5
65.2
38.5
56.2
75.6
88.6
26 More than 365 days
27
Minimal risk . . .
28
Low risk
29
Moderate risk . .
30
Other
9.50
9.95
8.46
9.32
9.62
1,837
63
190
632
545
91.9
93.3
76.2
85.8
99.6
27.3
42.4
2.0
1.0
58.0
6.5
69.5
24.1
61.8
66.3
72.4
1 All commercial and industrial loans
2
Minimal risk
3
Low risk
4
Moderate risk
5
Other
By maturity/repricing interval6
6 Zero interval
7
Minimal risk
8
Low risk
9
Moderate risk
10
Other
97
103
111
96
150
165
Weightedaverage risk
rating5
117
71
53
146
.0
43.8
83.4
*
88.1
Weightedaverage
maturity/
repricing
interval
Days
SIZE OF LOAN
(thousands of dollars)
31
32
33
34
1-99
100-999
1,000-9,999
10,000 or more
35
36
37
38
39
Prime7
Fed funds
Other domestic
Foreign
Other
10.11
9.50
9.09
7.94
1,683
3,589
3,814
870
3.1
3.0
3.2
2.7
336
341
660
113
86.5
82.6
77.6
44.2
23.3
24.2
24.7
26.5
2.1
7.7
15.1
45.5
66.4
77.3
84.0
76.6
153
1,432
1,717
3.2
3.1
3.1
2.9
2.9
459
655
395
78
639
84.3
60.2
95.4
49.6
82.5
28.6
55.1
12.4
4.0
18.9
6.2
.3
5.2
55.1
6.1
81.3
97.6
39.3
79.8
62.3
BASE RATE OF LOAN4
Footnotes appear at end of table.
9.88
8.40
7.75
8.85
A69
A70
4.23
Special Tables • August 2000
TERMS OF LENDING AT COMMERCIAL BANKS
Survey of Loans Made, May 1-5, 2000
E. Commercial and industrial loans made by U.S. branches and agencies of foreign banks1
Weightedaverage
effective
loan rate
(percent) 2
Amount of
loans
(millions
of dollars)
Average loan
size
(thousands of
dollars)
Amount of loans (percent)
Weightedaverage
maturity3
Days
Secured by
collateral
Subject to
prepayment
penalty
Made under
commitment
42.5
90.8
17.4
17.6
8.7
73.2
100.0
74.4
54.8
55.8
LOAN RISK5
1.3
19.0
12.3
2.0
.6
3.4
2.1
1.0
70.7
94.6
13.6
100.0
453
626
80.1
98.9
2.2
1.7
13,105
50,748
12,020
10,379
7,328
30
23
144
1
10
49.5
92.9
.1
16.2
12.7
1.1
6,469
961
1,011
1,222
2,345
4,671
4,416
6,736
2,841
5,451
75
241
20
118
34
18.9
75.7
8,090
2,034
1,757
807
3,282
3,064
4,059
4,250
1,356
3,158
414
1,129
79
150
235
19.7
45.1
3.7
40.9
7.2
Weightedaverage risk
rating5
Weightedaverage
maturity/
repricing
interval
7.23
6.67
7.07
7.22
8.15
44,511
14,110
6,784
7,910
9,902
9.31
10.13
549
66
9.59
10.52
155
199
444
438
11 Daily
12
Minimal risk
13
Low risk
14
Moderate risk
15
Other
6.47
6.91
7.02
7.31
29,074
11,045
3,873
5,726
4,068
16 2 to 30 days
Minimal risk
17
18
Low risk
19
Moderate risk
20
Other
7.58
7.02
6.94
7.47
8.20
21 31 to 365 days
22
Minimal risk
23
Low risk
24
Moderate risk
25
Other
8.12
7.48
7.49
7.77
9.00
1 All commercial and industrial loans
2
Minimal risk
Low risk
3
4
Moderate risk
5
Other
By maturity/reprieing
6 Zero interval
7
Minimal risk
Low risk
8
9
Moderate risk
10
Other
5,856
11,568
7,167
4,106
3,944
112
201
112
41
103
interval6
*
2.6
1.1
1.4
8.9
9.8
11.4
2.1
.5
5.3
2.0
1.6
86.9
100.0
2.1
.2
96.5
66.9
44.8
97.5
9.8
3.9
1.4
70.2
100.0
57.8
50.8
33.3
46.7
92.5
28.3
63.6
7.9
61.1
99.4
91.8
48.7
51.1
35.2
56.6
29.2
48.3
19.0
91.6
100.0
99.2
83.9
86.3
23.0
34.3
37.8
44.1
73.9
86.2
73.3
72.6
6.1
96.0
50.1
4.7
99.9
15.4
26 More than 365 days
27
Minimal risk . . .
28
Low risk
29
Moderate risk . .
30
Other
Days
SIZE OF LOAN
(thousands of dollars)
31
32
33
34
1-99
100-999
1,000-9,999
10,000 or more
9.18
8.48
7.67
7.05
35
1,298
9,303
33,875
3.1
3.0
10.08
7.04
7.35
7.07
7.54
2,027
16,878
2,380
21,853
1,373
3.2
3.1
2.7
1.7
4.3
2.8
2.2
58.2
49.8
29.8
42.8
19.2
11.2
4.3
1.0
BASE RATE OF LOAN4
35
36
37
38
39
7
Prime
Fed funds
Other domestic
Foreign
Other
Footnotes appear at end of table.
46.0
20.8
.1
59.2
40.2
1.1
1.3
5.8
99.7
69.9
12.5
Financial Markets
A71
NOTES TO TABLE 4.23
NOTE. The Survey of Terms of Business Lending collects data on gross loan extensions
made during the first full business week in the mid-month of each quarter. The authorized
panel size for the survey is 348 domestically chartered commercial banks and fifty U.S.
branches and agencies of foreign banks. The sample data are used to estimate the terms of
loans extended during that week at all domestic commercial banks and all U.S. branches and
agencies of foreign banks. Note that the terms on loans extended during the survey week may
differ from those extended during other weeks of the quarter. The estimates reported here are
not intended to measure the average terms on all business loans in bank portfolios.
1. As of December 31, 1996, assets of most of the large banks were at least $7.0 billion.
Median total assets for all insured banks were roughly $62 million. Assets at all U.S. branches
and agencies averaged 1.3 billion.
2. Effective (compounded) annual interest rates are calculated from the stated rate and
other terms of the loans and weighted by loan amount. The standard error of the loan rate for
all commercial and industrial loans in the current survey (line 1, column 1) is 0.16 percentage
point. The chances are about two out of three that the average rate shown would differ by less
than this amount from the average rate that would be found by a complete survey of the
universe of all banks.
3. Average maturities are weighted by loan amount and exclude loans with no stated
maturities.
4. The most common base pricing rate is that used to price the largest dollar volume of
loans. Base pricing rates include the prime rate (sometimes referred to as a bank's "base" or
"reference" rate); the federal funds rate; domestic money market rates other than the prime
rate and the federal funds rate; foreign money market rates; and other base rates not included
in the foregoing classifications.
5. A complete description of these risk categories is available from the Banking Analysis
Section, Mail Stop 81, Board of Governors of the Federal Reserve System, Washington, DC
20551. The category "Moderate risk" includes the average loan, under average economic
conditions, at the typical lender. The category "Other" includes loans rated "acceptable" as
well as special mention or classified loans. The weighted-average risk ratings published for
loans in rows 31-39 are calculated by assigning a value of "1" to minimal risk loans; "2" to
low risk loans; "3" to moderate risk loans, "4" to acceptable risk loans; and "5" to special
mention and classified loans. These values are weighted by loan amount and exclude loans
with no risk rating. Some of the loans in lines 1,6, 11, 16,21,26, and 31-39 are not rated for
risk.
6. The maturity/repricing interval measures the period from the date the loan is made until it
first may reprice or it matures. For floating-rate loans that are subject to repricing at any
time—such as many prime-based loans—the maturity/repricing interval is zero. For floating-rate
loans that have a scheduled repricing interval, the maturity/repricing interval measures the number
of days between the date the loan is made and the date on which it is next scheduled to reprice. For
loans having rates that remain fixed until the loan matures (fixed-rate loans), the maturity/repricing
interval measures the number of days between the date the loan is made and the date on which it
matures. Loans that reprice daily mature or reprice on the business day after they are made. Owing
to weekends and holidays, such loans may have maturity/repricing intervals in excess of one day;
such loans are not included in the "2 to 30 day" category.
7. For the current survey, the average reported prime rate, weighted by the amount of
loans priced relative to a prime base rate, was 9.02 percent for all banks; 9.00 percent for
large domestic banks, 9.10 percent for small domestic banks; and 9.00 percent for U.S.
branches and agencies of foreign banks.
A72
4.30
Special Tables • August 2000
ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, March 31, 2000'—Continued
Millions of dollars except as noted
All states2
Item
1 Total assets4
Total
including
IBFs3
IBFs
only3
New York
Total
including
IBFs
California
Illinois
IBFs
only
Total
including
IBFs
IBFs
only
Total
including
IBFs
IBFs
only
903,989
171,051
729,773
145,304
26,882
7,029
54,155
4,702
2 Claims on nonrelated parties
3 Cash and balances due from depository institutions
4
Cash items in process of collection and unposted debits
5
Currency and coin (U.S. and foreign)
Balances with depository institutions in United States
6
7
U.S. branches and agencies of other foreign banks
(including IBFs)
Other depository institutions in United States (including IBFs) . ..
8
y
Balances with banks in foreign countries and with foreign central
banks
Foreign branches of U.S. banks
10
n
Banks in home country and home-country central banks
12
All other banks in foreign countries and foreign central banks . . . .
13
Balances with Federal Reserve Banks
730,694
82,887
2,656
17
51,587
83,792
37,430
0
n.a.
13,571
581,520
77,772
2,535
12
48,458
71,950
35,256
0
n.a.
12,352
26,119
755
5
1
588
1,591
289
0
n.a.
167
53,892
2,872
26
0
1,391
4,117
1,627
0
n.a.
890
43,733
7,854
12,898
673
40,996
7,461
11,697
655
439
149
167
0
1,371
20
890
0
28,265
551
8,420
19,294
361
23,859
508
7,286
16,064
n.a.
26,489
513
8,344
17,631
278
22,904
481
7,224
15,198
n.a.
127
0
56
71
35
123
0
56
67
n.a.
1,447
0
0
1,446
8
737
0
0
737
n.a.
14 Total securities and loans
436,479
35,560
335,907
27,390
24,421
1,246
35,550
1,640
15 Total securities, book value
16
U.S. Treasury
Obligations of U.S. government agencies and corporations
17
18
Other bonds, notes, debentures, and corporate stock (including state
and local securities)
19
Securities of foreign governmental units
20
All Other
113,607
18,537
47,626
4,460
n.a.
n.a.
104,999
17,587
45,033
3,869
n.a.
n.a.
1,252
61
184
488
n.a.
n.a.
6,071
877
2,031
66
n.a.
n.a.
47,444
10,487
36,956
4,460
2,468
1,992
42,379
10,164
32,216
3,869
2,309
1,561
1,007
263
744
488
120
368
3,163
28
3,135
66
28
38
83,963
12,129
10,842
60,992
8,512
3,190
160
5,162
74,396
11,246
10,201
52,950
7,625
3,146
158
4,322
421
360
40
22
15
15
0
0
8,244
270
59
7,915
825
0
0
825
323,194
322
322,873
31,125
25
31,100
231,131
224
230,908
23,541
21
23,521
23,210
41
23,169
758
1
758
29,501
22
29,480
1,574
0
1,574
17,065
23,415
5,672
3,554
2,118
15
17,728
1,599
16,129
53,261
95
14,786
2,442
1,638
805
0
12,343
1,045
11,298
1,505
11,665
15,766
3,742
2,499
1,243
0
12,023
1,559
10,465
40,397
93
9,397
1,387
1,291
96
0
8,010
1,010
7,000
1,286
3,301
981
706
583
123
0
276
3
273
1,020
0
513
267
223
45
0
245
0
245
0
357
1,881
813
92
721
0
1,068
0
1,068
3,986
0
1,513
679
15
664
0
834
0
834
0
38 Commercial and industrial loans
39
U.S. addressees (domicile)
40
Non-U.S. addressees (domicile)
41 Acceptances of other banks
42
U.S. banks
43
Foreign banks
44 Loans to foreign governments and official institutions (including
foreign central banks)
45 Loans for purchasing or carrying securities (secured and unsecured) . . .
46 All other loans
207,029
168,891
38,138
767
6
761
12,360
31
12,329
8
0
8
143,966
116,256
27,710
116
2
114
10,574
31
10,543
8
0
8
17,667
16,138
1,529
16
4
12
222
0
222
0
0
0
21,719
19,980
1,738
635
0
635
51
0
51
0
0
0
3,568
11,030
6,256
2,258
22
90
2,971
10,359
5,643
2,084
22
76
148
0
77
24
0
0
108
50
213
9
0
0
47
48
49
50
51
52
53
54
55
56
57
58
801
801
0
91,602
35,762
1,476
788
687
34,287
173,295
173,295
0
0
0
679
1,611
n.a.
n.a.
n.a.
1,611
87,258
n.a.
249
249
0
62,447
30,997
1,019
633
386
29,979
148,254
148,254
0
0
0
679
999
n.a.
n.a.
n.a.
999
73,354
n.a.
0
0
0
58
463
130
130
0
333
763
763
0
0
0
0
40
n.a.
n.a.
n.a.
40
5,438
n.a.
552
552
0
5,185
2,042
283
24
259
1,759
262
262
0
0
0
0
26
n.a.
21 Federal funds sold and securities purchased under agreements to
resell
22
U.S. branches and agencies of other foreign banks
23
Commercial banks in United States
24
Other
25 Total loans, gross
26
LESS: Unearned income on loans
27
EQUALS: Loans, net
Total loans, gross, by category
28 Real estate loans
29 Loans to depository institutions
Commercial banks in United States (including IBFs)
30
31
U.S. branches and agencies of other foreign banks
32
Other commercial banks in United States
33
Other depository institutions in United States (including IBFs)
34
Banks in foreign countries
Foreign branches of U.S. banks
35
Other banks in foreign countries
36
37 Loans to other financial institutions
Lease financing receivables (net of unearned income)
U.S. addressees (domicile)
Non-U.S. addressees (domicile)
Trading assets
All other assets
Customers' liabilities on acceptances outstanding
U.S. addressees (domicile)
Non-U.S. addressees (domicile)
Other assets including other claims on nonrelated parties
Net due from related depository institutions5
Net due from head office and other related depositor}' institutions . . .
Net due from establishing entity, head office, and other related
depository institutions5
26
585
n.a.
87,258
n.a.
73,354
n.a.
5,438
n.a.
59 Total liabilities4
903,989
171,051
729,773
145,304
26,882
7,029
54,155
4,702
60 Liabilities to nonrelated parties
779,332
152,571
651,408
129,712
12,679
6,909
40,983
3,350
Footnotes appear at end of table.
585
U.S. Branches and Agencies
4.30
A73
ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, March 31, 2000 1 —Continued
Millions of dollars except as noted
All states2
Item
61 Total deposits and credit balances
Individuals, partnerships, and corporations
62
U.S. addressees (domicile)
63
Non-U.S. addressees (domicile)
64
65
Commercial banks in United States (including IBFs)
66
U.S. branches and agencies of other foreign banks
Other commercial banks in United States
67
68
Banks in foreign countries
Foreign branches of U.S. banks
69
Other banks in foreign countries
70
Foreign governments and official institutions
71
(including foreign central banks)
All other deposits and credit balances
72
Certified and official checks
73
74 Transaction accounts and credit balances (excluding IBFs)
Individuals, partnerships, and corporations
75
76
U.S. addressees (domicile)
Non-U.S. addressees (domicile)
77
Commercial banks in United States (including IBFs)
78
79
U.S. branches and agencies of other foreign banks
80
Other commercial banks in United States
Banks in foreign countries
81
Foreign branches of U.S. banks
82
Other banks in foreign countries
83
84
Foreign governments and official institutions
(including foreign central banks)
AH other deposits and credit balances
85
Certified and official checks
86
87 Demand deposits (included in transaction accounts
and credit balances)
Individuals, partnerships, and corporations
88
89
U.S. addressees (domicile)
Non-U.S. addressees (domicile)
90
Commercial banks in United States (including IBFs)
91
92
U.S. branches and agencies of other foreign banks
Other commercial banks in United States
93
Banks in foreign countries
94
Foreign branches of U.S. banks
95
Other banks in foreign countries
96
Foreign governments and official institutions
97
(including foreign central banks)
All other deposits and credit balances
98
Certified and official checks
99
100 Nontransaction accounts (including MMDAs, excluding IBFs)
Individuals, partnerships, and corporations
101
U.S. addressees (domicile)
102
Non-U.S. addressees (domicile)
103
Commercial banks in United States (including IBFs)
104
105
U.S. branches and agencies of other foreign banks
Other commercial banks in United States
106
107
Banks in foreign countries
Foreign branches of U.S. banks
108
Other banks in foreign countries
109
Foreign governments and official institutions
110
(including foreign central banks)
All other deposits and credit balances
111
112 IBF deposit liabilities
Individuals, partnerships, and corporations
113
114
U.S. addressees (domicile)
Non U.S. addressees (domicile)
115
Commercial banks in United States (including IBFs)
116
U.S. branches and agencies of other foreign banks
117
Other commercial banks in United States
118
Banks in foreign countries
119
Foreign branches of U.S. banks
120
121
Other banks in foreign countries
122
Foreign governments and official institutions
(including foreign central banks)
All other deposits and credit balances
123
Footnotes appear at end of table.
Total
excluding
IBFs3
IBFs
only3
New York
Total
excluding
IBFs
California
Illinois
IBFs
only
Total
excluding
IBFs
IBFs
only
Total
excluding
IBFs
IBFs
only
380,861
291,204
274,286
16,918
44,516
18,199
26,317
9,335
1,080
8,255
107,807
11,817
19
11,798
12 464
11,684
780
60,011
4,882
55,129
314,896
233,337
222,442
10,895
40,034
15,176
24,858
8,940
1,080
7,860
95,025
6,511
15
6, 496
12,082
11,410
672
56,890
4,745
52,144
3,637
2,450
807
1,643
356
0
356
8
0
8
1,606
202
0
202
119
59
60
540
0
540
17,707
15,225
14,998
227
1,025
364
661
150
0
150
2,253
4
0
4
220
172
48
979
137
842
17,533
18 098
175
23,513
2
15,783
16,647
156
19,542
0
9
09
5
745
0
1,305
0
1
1,C148
2
8,583
7,130
5,003
2,127
45
11
34
727
0
727
6,460
5,352
4,116
1,236
35
10
24
513
0
513
270
254
140
114
0
0
0
8
0
8
612
508
605
4
0
0
0
0
0
0
353
152
175
273
131
156
2
1
5
2
0
1
8,051
6,728
4,849
1,879
42
U
31
679
0
679
6,155
5,173
4,020
1,153
32
10
21
466
0
466
207
192
120
72
0
0
0
8
0
8
609
605
602
4
0
0
0
0
0
0
n.a.
n a.
n.a.
349
77
175
269
60
156
2
0
5
2
0
1
372,278
284,074
269,283
14,791
44,470
18 188
26,282
8 608
1,080
7,528
308,437
227,985
218,326
9,659
39,999
15,165
24,834
8,427
1,080
7,347
3,367
2,196
666
1,529
356
0
356
0
0
0
17,095
14,617
14,394
223
1,025
364
661
150
0
150
17,180
17,945
15,510
16,516
7
08
1,303
0
k
n a.
107,807
11,817
19
11,798
12,464
11,684
780
60,011
4,882
55.129
23.513
2
A
n a.
95,025
6,511
15
6,496
12,082
11,410
672
56,890
4,745
52.144
19.542
0
n a.
1,606
202
0
202
119
59
60
540
0
540
745
0
n a.
n.a.
2,253
4
0
4
220
172
48
979
137
842
1,048
2
A74
4.30
Special Tables • August 2000
ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, March 31, 2000'—Continued
Millions of dollars except as noted
All states2
Item
124 Federal funds purchased and securities sold under agreements to
repurchase
125
U.S. branches and agencies of other foreign banks
126
Other commercial banks in United States
127
Other
128 Other borrowed money
129 Owed to nonrelated commercial banks in United States (including
IBFs)
130
Owed to U.S. offices of nonrelated U.S. banks
131
Owed to U.S. branches and agencies of nonrelated
foreign banks
132 Owed to nonrelated banks in foreign countries
133
Owed to foreign branches of nonrelated U.S. banks
134
Owed to foreign offices of nonrelated foreign banks
135 Owed to others
136 All other liabilities
137
Branch or agency liability on acceptances executed and
outstanding
138
Trading liabilities
139
Other liabilities to nonrelated parties
140 Net due to related depository institutions5
141
Net due to head office and other related depository institutions5 . . . .
142
Net due to establishing entity, head office, and other related
depository institutions5
Total
including
IBFs3
New York
IBFs
only3
Illinois
California
Total
including
IBFs
IBFs
only
Total
including
IBFs
IBFs
only
Total
including
IBFs
IBFs
only
119,545
12,694
8,434
98,417
77,127
20,313
4,379
652
15,282
23,097
108,921
10,167
6,871
91,883
59,286
16,516
3,565
597
12,353
16,933
1,289
632
298
359
5,770
644
352
31
261
4,615
5,428
979
452
3,997
5,338
88
112
24
752
194
10,698
4,297
4,204
285
8,977
4,004
3,442
272
816
74
598
10
443
67
20
0
6,400
18,141
1,165
16,976
48,289
3,918
15,296
1,052
14,245
3,597
4,973
13,299
752
12,547
37,009
3,170
10,549
651
9,897
2,942
742
3,431
375
3,056
1,524
5 88
3,423
375
3,048
594
376
176
0
176
4,719
20
174
0
174
0
93,991
1,354
73,280
1,239
377
45
10,257
15
1,827
65,601
26,563
n.a.
27
1,327
1,178
49,964
22,138
n.a.
27
1,212
131
45
201
n.a.
0
45
467
8,370
1,421
n.a.
0
15
124,657
124,657
18,480
n a.
78,365
78,365
15,592
n.a.
14,203
14,203
119
n.a.
13,171
13,171
1,352
n.a.
n.a.
18,480
n.a.
15,592
n.a.
119
n.a.
1,352
MEMO
143 Non-interest-bearing balances with commercial banks
in United States
144 Holding of own acceptances included in commercial and
industrial loans
145 Commercial and industrial loans with remaining maturity of one year
or less (excluding those in nonaccrual status)
146
Predetermined interest rates
147
Floating interest rates
148 Commercial and industrial loans with remaining maturity of more
than one year (excluding those in nonaccrual status)
149
Predetermined interest rates
150
Floating interest rates
Footnotes appear at end of table.
0
2,970
0
2,826
0
35
7
0
1,984
•>
1,519
•
169
>
204
•
104,607
61,482
43,125
n.a.
63,310
33,960
29,350
n.a.
9,054
4,070
4,984
n.a.
17,504
14,840
2,664
n.a.
100,735
22,552
78,183
79,358
18,853
60,505
8,521
1,124
7,398
4,148
571
3,577
U.S. Branches and Agencies
4.30
A75
ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, March 31, 2000 1 —Continued
Millions of dollars except as noted
All states2
Item
151 Components of total nontransaction accounts,
included in total deposits and credit balances
(excluding IBFs)
152
Time deposits of $100,000 or more
153
Time CDs in denominations of $100,000 or more
with remaining maturity of more than 12 months
New York
Total
excluding
IBFs3
IBFs
only3
Total
excluding
IBFs
IBFs
only
373,619
368,113
n.a.
n.a.
311,100
305,704
5,506
n.a.
5,396
All states2
154 Immediately available funds with a maturity greater than one day
included in other borrowed money
155 Number of reports filed6
Illinois
Total
excluding
IBFs
IBFs
only
Total
excluding
IBFs
IBFs
only
n.a.
n.a.
3,176
3,156
n.a.
n.a.
17,026
16,973
n.a.
n.a.
n.a.
20
n.a.
53
n.a.
New York
Total
including
IBFs
IBFs
only
Total
including
IBFs
IBFs
only
30,738
354
n.a.
0
26,618
184
n.a.
0
1. Data are aggregates of categories reported on the quarterly form FFIEC 002, "Report of
Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks." The form was first
used for reporting data as of June 30, 1980, and was revised as of December 31, 1985. From
November 1972 through May 1980, U.S. branches and agencies of foreign banks had filed a
monthly FR 886a report. Aggregate data from that report were available through the Federal
Reserve monthly statistical release G.l 1, last issued on July 10, 1980. Data in this table and in
the G. 11 tables are not strictly comparable because of differences in reporting panels and in
definitions of balance sheet items.
2. Includes the District of Columbia.
3. Effective December 1981, the Federal Reserve Board amended Regulations D and Q to
permit banking offices located in the United States to operate international banking facilities
(IBFs). Since December 31, 1985, data for IBFs have been reported in a separate column.
These data are either included in or excluded from the total columns as indicated in the
headings. The notation "n.a." indicates that no IBF data have been reported for that item,
California
California
Illinois
Total
including
IBFs
IBFs
only
Total
including
IBFs
IBFs
only
2,681
72
n.a.
0
890
29
n.a.
0
either because the item is not an eligible IBF asset or liability or because that level of detail is
not reported for IBFs. From December 1981 through September 1985, IBF data were
included in all applicable items reported.
4. Total assets and total liabilities include net balances, if any, due from or owed to related
banking institutions in the United States and in foreign countries (see note 5). On the former
monthly branch and agency report, available through the G.ll monthly statistical release,
gross balances were included in total assets and total liabilities. Therefore, total asset and total
liability figures in this table are not comparable to those in the G.l 1 tables.
5. Related depository institutions includes the foreign head office and other U.S. and
foreign branches and agencies of a bank, a bank's parent holding company, and majorityowned banking subsidiaries of the bank and of its parent holding company (including
subsidiaries owned both directly and indirectly).
6. In some cases two or more offices of a foreign bank within the same metropolitan area
file a consolidated report.
A76
4.31
Special Tables • August 2000
PRO FORMA FINANCIAL STATEMENTS FOR FEDERAL RESERVE PRICED SERVICES
A.
Pro forma balance sheet
Millions of dollars
Mar. 31, 2000
Mar. 31, 2000
Item
Short-term assets (Note 1)
Imputed reserve requirement on clearing balances
Investment in marketable securities
Receivables
Materials and supplies
Prepaid expenses
Items in process of collection
671.3
6,041.7
73.4
4.1
29.8
4,406.3
640.9
5.768.1
80.5
3.5
32.9
2.823.2
404.7
143.1
29.5
459.3
440.2
167.5
48.1
571.7
1,227.5
1,036.5
10,576.6
12,263.1
Total long-term assets
Total assets
Short-term liabilities
Clearing balances and balances arising from early credit
of uncollected items
Deferred-availability items
6,192.0
4,927.3
107.4
6,173.2
3,059.0
116.8
9,349.1
Total short-term liabilities
Long-term liabilities
Obligations under capital leases
Long-term debt
Postretirement/postemployment benefits obligation
:
Total liabilities
Total liabilities and equity (Note 3)
NOTE. Components may not sum to totals because of rounding. The priced services
financial statements consist of these tables and the accompanying notes.
(L) S H O R T - T E R M ASSETS
The imputed reserve requirement on clearing balances held at Reserve Banks by depository
institutions reflects a treatment comparable to that of compensating balances held at correspondent banks by respondent institutions. The reserve requirement imposed on respondent
balances must be held as vault cash or as nonearning balances maintained at a Reserve Bank;
thus, a portion of priced services clearing balances held with the Federal Reserve is shown as
required reserves on the asset side of the balance sheet. The remainder of clearing balances is
assumed to be invested in three-month Treasury bills, shown as investment in marketable
securities.
Receivables are (1) amounts due the Reserve Banks for priced services and (2) the share of
suspense-account and difference-account balances related to priced services.
Materials and supplies are the inventory value of short-term assets.
Prepaid expenses include salary advances and travel advances for priced-service personnel.
Items in process of collection is gross Federal Reserve cash items in process of collection
(CIPC) stated on a basis comparable to that of a commercial bank. It reflects adjustments for
intra-System items that would otherwise be double-counted on a consolidated Federal
Reserve balance sheet; adjustments for items associated with non-priced items, such as those
collected for government agencies; and adjustments for items associated with providing fixed
availability or credit before items are received and processed. Among the costs to be
recovered under the Monetary Control Act is the cost of float, or net CIPC during the period
(the difference between gross CIPC and deferred-availability items which is the portion of
gross CIPC that involves a financing cost), valued at the federal funds rate.
11,226.7
0.0
214.7
219.3
0.0
390.5
236.4
Total long-term liabilities
11,226.7
9,349.1
Total short-term assets
Long-term assets (Note 2)
Premises
Furniture and equipment
Leases and leasehold improvements
Prepaid pension costs
626.9
434.1
9,976.0
11,660.7
600.6
602.4
10,576.6
12,263.1
(2) LONG-TERM ASSETS
Consists of long-term assets used solely in priced services, the priced-services portion of
long-term assets shared with nonpriced services, and an estimate of the assets of the Board of
Governors used in the development of priced services. Effective Jan. 1, 1987, the Reserve
Banks implemented the Financial Accounting Standards Board's Statement of Financial
Accounting Standards No. 87, Employers' Accounting for Pensions (SFAS 87). Accordingly,
the Federal Reserve Banks recognized credits to expenses of $28.9 million in the first quarter
of 2000, and $21.9 million in the first quarter of 1999, and corresponding increases in this
asset account.
( 3 ) LIABILITIES AND EQUITY
Under the matched-book capital structure for assets that are not "self-financing," short-term
assets are financed with short-term debt. Long-term assets are financed with long-term debt
and equity in a proportion equal to the ratio of long-term debt to equity for the fifty largest
bank holding companies, which are used in the model for the private-sector adjustment factor
(PSAF). The PSAF consists of the taxes that would have been paid and the return on capital
that would have been provided had priced services been furnished by a private-sector firm.
Other short-term liabilities include clearing balances maintained at Reserve Banks and
deposit balances arising from float. Other long-term liabilities consist of obligations on capital
leases.
Bank-Reported Data
4.31
All
PRO FORMA FINANCIAL STATEMENTS FOR FEDERAL RESERVE PRICED SERVICES
B.
Pro forma income statement
Millions of dollars
Item
Quarter ending Mar. 31, 2000
Quarter ending Mar. 31, 1999
Revenue from services provided to depository institutions (Note 4)
211.5
203.1
Operating expenses (Note 5)
172.8
170.4
Income from operations
38.8
Inputed costs (Note 6)
Interest on float
Interest on debt
Sales taxes
FDIC insurance
2.8
7.9
2.3
0.0
Income from operations after imputed costs
13.0
32.8
5.4
4.6
2.2
.8
25.8
Other income and expenses (Note 7)
Investment income on clearing balances
Earnings credits
104.9
(88.4)
Income before income taxes
16.4
42.2
13.1
19.7
81.9
(70.5)
11.4
31.1
Inputed income taxes (Note 8)
13.3
10.0
Net income
28.9
21.2
MEMO
Targeted return on equity (Note 9)
24.6
17.3
NOTE. Components may not sum to totals because of rounding. The priced services
financial statements consist of these tables and the accompanying notes.
(4) REVENUE
Revenue represents charges to depository institutions for priced services and is realized from
each institution through one of two methods: direct charges to an institution's account or
charges against its accumulated earnings credits.
(5) OPERATING EXPENSES
Operating expenses consist of the direct, indirect, and other general administrative expenses
of the Reserve Banks for priced services plus the expenses for staff members of the Board of
Governors working directly on the development of priced services. The expenses for Board
staff members were $1.05 million in the first quarter of 2000 and $0.85 million in the first
quarter of 1999. The credit to expenses under SFAS 87 (see note 2) is reflected in operating
expenses.
( 6 ) IMPUTED C O S T S
Imputed costs consist of interest on float, interest on debt, sales taxes, and the FDIC
assessment. Interest on float is derived from the value of float to be recovered, either
explicitly or through per-item fees, during the period. Float costs include costs for checks,
book-entry securities, noncash collection, ACH, and funds transfers.
Interest is imputed on the debt assumed necessary to finance priced-service assets. The
sales taxes and FDIC assessment that the Federal Reserve would have paid had it been a
private-sector firm are among the components of the PSAF (see note 3).
Float costs are based on the actual float incurred for each priced service, multiplied by the
appropriate federal funds rate. Other imputed costs are allocated among priced services
according to the ratio of operating expenses less shipping expenses for each service to the
total expenses for all services less the total shipping expenses for all services.
The following list shows the daily average recovery of float (before converting to float
costs) by the Reserve Banks for the first quarter of 2000 and 1999 in millions of dollars:
Total float
Unrecovered float
Float subject to recovery
Sources of float recovery
Income on clearing balances
As-of adjustments
Direct charges
Per-item fees
2000
1999
222.9
(436.5)
659.4
486.0
(516.1)
1,002.1
66.0
451.7
311.3
(169.6)
98.9
531.8
245.2
126.2
Unrecovered float includes float generated by services to government agencies and by other
central bank services. Float recovered through income on clearing balances is the result of the
increase in investable clearing balances; the increase is produced by a deduction for float for
cash items in process of collection, which reduces imputed reserve requirements. The income
on clearing balances reduces the float to be recovered through other means. As-of adjustments
are memorandum adjustments to an institution's reserve or clearing position to recover float
incurred by the institution. Direct charges are billed to the institution for float incurred when
an institution chooses to close on a normal business day and for float incurred on interterritory
check transportation. Float recovered through direct charges is valued at cost using the federal
funds rate and charged directly to an institution's account. Float recovered through per-item
fees is valued at the federal funds rate and has been added to the cost base subject to recovery
in the first quarter of 2000 and 1999.
( 7 ) O T H E R INCOME AND EXPENSES
Consists of imputed investment income on clearing balances and the actual cost of earnings
credits. Investment income on clearing balances represents the average coupon-equivalent
yield on three-month Treasury bills applied to the total clearing balance maintained, adjusted
for the effect of reserve requirements on clearing balances. Expenses for earnings credits
granted to depository institutions on their clearing balances are derived by applying the
average federal funds rate to the required portion of the clearing balances, adjusted for the net
effect of reserve requirements on clearing balances.
( 8 ) INCOME TAXES
Imputed income taxes are calculated at the effective tax rate derived from the PSAF model
(see note 3).
( 9 ) R E T U R N ON E Q U I T Y
Represents the after-tax rate of return on equity that the Federal Reserve would have earned
had it been a private business firm, as derived from the PSAF model (see note 3). This amount
is adjusted to reflect the recovery of automation consolidation costs of $0.0 million for first
quarter of 2000, and $3.3 million for the first quarter of 1999. The Reserve Banks recovered
these amounts, along with a finance charge, by the end of 1999.
78
Federal Reserve Bulletin • August 2000
Index to Statistical Tables
References are to pages A3-A77, although the prefix 'A" is omitted in this index
ACCEPTANCES, bankers (See Bankers acceptances)
Assets and liabilities (See also Foreigners)
Commercial banks, 15-21, 64, 65
Domestic finance companies, 32, 33
Federal Reserve Banks, 10
Foreign banks, U.S. branches and agencies, 72-5
Foreign-related institutions, 20
Automobiles
Consumer credit, 36
Production, 44, 45
BANKERS acceptances, 5, 10, 22, 23
Bankers balances, 15-21, 72-5. (See also Foreigners)
Bonds (See also U.S. government securities)
New issues, 31
Rates, 23
Business activity, nonfinancial, 42
Business loans (See Commercial and industrial loans)
CAPACITY utilization, 43
Capital accounts
Commercial banks, 15-21, 64, 65
Federal Reserve Banks, 10
Certificates of deposit, 23
Commercial and industrial loans
Commercial banks, 15-21, 64—71
Weekly reporting banks, 17, 18
Commercial banks
Assets and liabilities, 15-21, 64, 65
Commercial and industrial loans, 15-21, 64-71
Consumer loans held, by type and terms, 36, 66-71
Real estate mortgages held, by holder and property, 35
Terms of lending, 64, 65
Time and savings deposits, 4
Commercial paper, 22, 23, 32
Condition statements (See Assets and liabilities)
Construction, 42, 46
Consumer credit, 36
Consumer prices, 42
Consumption expenditures, 48, 49
Corporations
Profits and their distribution, 32
Security issues, 31, 61
Cost of living (See Consumer prices)
Credit unions, 36
Currency in circulation, 5, 13
Customer credit, stock market, 24
DEBT (See specific types of debt or securities)
Demand deposits, 15—21
Depository institutions
Reserve requirements, 8
Reserves and related items, 4—6, 12, 64, 65
Deposits (See also specific types)
Commercial banks, 4, 15-21, 64, 65
Federal Reserve Banks, 5, 10
Discount rates at Reserve Banks and at foreign central banks and
foreign countries (See Interest rates)
Discounts and advances by Reserve Banks (See Loans)
Dividends, corporate, 32
EMPLOYMENT, 42
Euro, 62
FARM mortgage loans, 35
Federal agency obligations, 5, 9-11, 28, 29
Federal credit agencies, 30
Federal finance
Debt subject to statutory limitation, and types and ownership
of gross debt, 27
Receipts and outlays, 25, 26
Treasury financing of surplus, or deficit, 25
Treasury operating balance, 25
Federal Financing Bank, 30
Federal funds, 23, 25
Federal Home Loan Banks, 30
Federal Home Loan Mortgage Corporation, 30, 34, 35
Federal Housing Administration, 30, 34, 35
Federal Land Banks, 35
Federal National Mortgage Association, 30, 34, 35
Federal Reserve Banks
Condition statement, 10
Discount rates (See Interest rates)
U.S. government securities, 5, 10, 11, 27
Federal Reserve credit, 5, 6, 10, 12
Federal Reserve notes, 10
Federal Reserve System
Balance sheet for priced services, 76, 77
Condition statement for priced services, 76, 77
Federally sponsored credit agencies, 30
Finance companies
Assets and liabilities, 32
Business credit, 33
Loans, 36
Paper, 22, 23
Float, 5
Flow of funds, 37-^-1
Foreign banks, U.S. branches and agencies, 71-5
Foreign currency operations, 10
Foreign deposits in U.S. banks, 5
Foreign exchange rates, 62
Foreign-related institutions, 20
Foreign trade, 51
Foreigners
Claims on, 52, 55-7, 59
Liabilities to, 51-3, 58, 60, 61
GOLD
Certificate account, 10
Stock, 5, 51
Government National Mortgage Association, 30, 34, 35
Gross domestic product, 48, 49
HOUSING, new and existing units, 46
INCOME and expenses, Federal Reserve System, 76, 77
Income, personal and national, 42, 48, 49
Industrial production, 42, 44
Insurance companies, 27, 35
Interest rates
Bonds, 23
Commercial banks, 66-71
Consumer credit, 36
Federal Reserve Banks, 7
Money and capital markets, 23
Mortgages, 34
Prime rate, 22, 66-71
International capital transactions of United States, 50-61
International organizations, 52, 53, 55, 58, 59
Inventories, 48
Investment companies, issues and assets, 32
Investments (See also specific types)
Commercial banks, 4, 15-21, 66-71
Federal Reserve Banks, 10, 11
Financial institutions, 35
A79
LABOR force, 42
Life insurance companies (See Insurance companies)
Loans (See also specific types)
Commercial banks, 15-21, 64-71
Federal Reserve Banks, 5 - 7 , 10, 11
Federal Reserve System, 76, 77
Financial institutions, 35
Foreign banks, U.S. branches and agencies, 72
Insured or guaranteed by United States, 34, 35
MANUFACTURING
Capacity utilization, 43
Production, 43, 45
Margin requirements, 24
Member banks, reserve requirements, 8
Mining production, 45
Mobile homes shipped, 46
Monetary and credit aggregates, 4, 12
Money and capital market rates, 23
Money stock measures and components, 4, 13
Mortgages (See Real estate loans)
Mutual funds, 13, 32
Mutual savings banks (See Thrift institutions)
NATIONAL defense outlays, 26
National income, 48
OPEN market transactions, 9
PERSONAL income, 49
Prices
Consumer and producer, 42, 47
Stock market, 24
Prime rate, 22, 66-71
Producer prices, 42, 47
Production, 42, 44
Profits, corporate, 32
REAL estate loans
Banks, 15-21, 35
Terms, yields and activity, 34
Type and holder and property mortgaged, 35
Reserve requirements, 8
Reserves
Commercial banks, 15-21
Depository institutions, 4—6, 12
Federal Reserve Banks, 10
U.S. reserve assets, 51
Residential mortgage loans, 34, 35
Retail credit and retail sales, 36, 42
SAVING
Flow of funds, 37-41
National income accounts, 48
Savings deposits (See Time and savings deposits)
Savings institutions, 35-7, 41
Securities (See also specific types)
Federal and federally sponsored credit agencies, 30
Foreign transactions, 60
New issues, 31
Prices, 24
Special drawing rights, 5, 10, 50, 51
State and local governments
Holdings of U.S. government securities, 27
New security issues, 31
Rates on securities, 23
Stock market, selected statistics, 24
Stocks (See also Securities)
New issues, 31
Prices, 24
Student Loan Marketing Association, 30
TAX receipts, federal, 26
Thrift institutions, 4. (See also Credit unions and Savings
institutions)
Time and savings deposits, 4, 13, 15-21, 64, 65
Trade, foreign, 51
Treasury cash, Treasury currency, 5
Treasury deposits, 5, 10, 25
Treasury operating balance, 25
UNEMPLOYMENT, 42
U.S. government balances
Commercial bank holdings, 15-21
Treasury deposits at Reserve Banks, 5, 10, 25
U.S. government securities
Bank holdings, 15-21, 27
Dealer transactions, positions, and financing, 29
Federal Reserve Banks holdings, 5, 10, 11, 27
Foreign and international holdings and transactions, 10, 27, 61
Open market transactions, 9
Outstanding, by type and holder, 27, 28
Rates, 23
U.S. international transactions, 50-62
Utilities, production, 45
VETERANS Administration, 34, 35
WEEKLY reporting banks, 17, 18
Wholesale (producer) prices, 42, 47
YIELDS (See Interest rates)
80
Federal Reserve Bulletin • August 2000
Federal Reserve Board of Governors
and Official Staff
A L A N GREENSPAN,
Chairman
Vice Chairman
EDWARD W . KELLEY, JR.
ROGER W . FERGUSON, JR.,
LAURENCE H . M E Y E R
OFFICE OF BOARD MEMBERS
DIVISION OF INTERNATIONAL FINANCE
LYNN S. FOX, Assistant to the Board
DONALD J. WINN, Assistant to the Board
WINTHROP P. HAMBLEY, Deputy Congressional
Liaison
BOB STAHLY MOORE, Special Assistant to the Board
ROSANNA PIANALTO-CAMERON, Special Assistant to the
DAVID W. SKIDMORE, Special Assistant to the Board
DIANE E. WERNEKE, Special Assistant to the Board
KAREN H . JOHNSON,
Board
LEGAL DIVISION
J. VIRGIL MATTINGLY, JR., General
Counsel
SCOTT G. ALVAREZ, Associate
General
Counsel
RICHARD M . ASHTON, Associate
General
Counsel
OLIVER IRELAND, Associate
General
Counsel
KATHLEEN M . O'DAY, Associate
General
Counsel
A N N E. MISBACK, Assistant General
Counsel
SANDRA L. RICHARDSON, Assistant General
Counsel
STEPHEN L. SICILIANO, Assistant General
Counsel
KATHERINE H. WHEATLEY, Assistant General
Counsel
OFFICE OF THE SECRETARY
JENNIFER J. JOHNSON,
Secretary
ROBERT DEV. FRIERSON, Associate
Secretary
BARBARA R. LOWREY, Associate
Secretary and
Ombudsman
DIVISION OF BANKING
SUPERVISION AND REGULATION
RICHARD SPILLENKOTHEN,
Director
STEPHEN C. SCHEMERING, Deputy
Director
HERBERT A . BIERN, Associate
Director
ROGER T. COLE, Associate
Director
WILLIAM A . RYBACK, Associate
Director
GERALD A . EDWARDS, JR., Deputy Associate
Director
STEPHEN M . HOFFMAN, JR., Deputy Associate
Director
JAMES V. HOUPT, Deputy Associate
Director
JACK P. JENNINGS, Deputy Associate
Director
MICHAEL G. MARTINSON, Deputy Associate
Director
SIDNEY M . SUSSAN, Deputy Associate
Director
MOLLY S. WASSOM, Deputy Associate
Director
HOWARD A . AMER, Assistant
Director
NORAH M . BARGER, Assistant
Director
BETSY CROSS, Assistant
Director
RICHARD A . SMALL, Assistant
Director
WILLIAM C. SCHNEIDER, JR., Project
Director,
National Information
Center
Director
DAVID H. HOWARD, Deputy
Director
VINCENT R. REINHART, Deputy
Director
DALE W. HENDERSON, Associate
Director
THOMAS A . CONNORS, Deputy Associate
Director
DONALD B . ADAMS, Senior
Adviser
RICHARD T. FREEMAN, Assistant
Director
WILLIAM L. HELKIE, Assistant
Director
STEVEN B. KAMIN, Assistant
Director
RALPH W. TRYON, Assistant
Director
DIVISION OF RESEARCH AND STATISTICS
DAVID J. STOCKTON,
Director
EDWARD C. ETTIN, Deputy
Director
DAVID WILCOX, Deputy
Director
WILLIAM R. JONES, Associate
Director
MYRON L. KWAST, Associate
Director
STEPHEN D . OLINER, Associate
Director
PATRICK M . PARKINSON, Associate
Director
LAWRENCE SLIFMAN, Associate
Director
CHARLES S. STRUCKMEYER, Associate
Director
MARTHA S. SCANLON, Deputy Associate
Director
JOYCE K. ZICKLER, Deputy Associate
Director
STEPHEN A . RHOADES, Assistant
Director
WAYNE S. PASSMORE, Assistant
Director
DAVID L. REIFSCHNEIDER, Assistant
Director
JANICE SHACK-MARQUEZ, Assistant
Director
ALICE PATRICIA WHITE, Assistant
Director
GLENN B. CANNER, Senior
Adviser
DAVID S. JONES, Senior
Adviser
THOMAS D . SIMPSON, Senior
Adviser
DIVISION OF MONETARY AFFAIRS
DONALD L . KOHN,
Director
DAVID E. LINDSEY, Deputy
Director
BRIAN F. MADIGAN, Associate
Director
RICHARD D . PORTER, Deputy Associate
Director
WILLIAM C. WHITESELL, Assistant
Director
NORMAND R.V. BERNARD, Special Assistant to the
DIVISION OF CONSUMER
AND COMMUNITY AFFAIRS
DOLORES S. SMITH,
Director
GLENN E. LONEY, Deputy
Director
SANDRA F. BRAUNSTEIN, Assistant
Director
MAUREEN P. ENGLISH, Assistant
Director
ADRIENNE D . HURT, Assistant
Director
IRENE SHAWN M C N U L T Y , Assistant
Director
Board
A81
EDWARD M . GRAMLICH
OFFICE OF
STAFF DIRECTOR FOR MANAGEMENT
STEPHEN R. MALPHRUS, Staff
Director
MANAGEMENT DIVISION
STEPHEN J. CLARK, Associate Director, Finance Function
DARRELL R. PAULEY, Associate Director, Human Resources
Function
SHEILA CLARK, EE0 Programs
Director
DIVISION OF SUPPORT SERVICES
ROBERT E . FRAZIER,
Director
Director
DIVISION OF INFORMATION TECHNOLOGY
Director
MARIANNE M. EMERSON, Deputy Director
MAUREEN T. HANNAN, Associate
Director
TILLENA G. CLARK, Assistant
Director
GEARY L. CUNNINGHAM, Assistant
Director
Po KYUNG KIM, Assistant
Director
RAYMOND H. MASSEY, Assistant
Director
SHARON L. MOWRY, Assistant
Director
DAY W. RADEBAUGH, JR., Assistant
Director
LOUISE L . ROSEMAN,
Director
PAUL W. BETTGE, Assistant
Director
KENNETH D. BUCKLEY, Assistant
Director
JACK DENNIS, JR., Assistant
Director
JOSEPH H. HAYES, JR., Assistant
Director
JEFFREY C. MARQUARDT, Assistant
Director
EDGAR A. MARTINDALE, Assistant
Director
MARSHA REIDHILL, Assistant
Director
JEFF J. STEHM, Assistant
Director
Director
GEORGE M. LOPEZ, Assistant
DAVID L. WILLIAMS, Assistant
RICHARD C . STEVENS,
DIVISION OF RESERVE BANK OPERATIONS
AND PAYMENT SYSTEMS
OFFICE OF THE INSPECTOR
GENERAL
BARRY R. SNYDER, Inspector
General
DONALD L. ROBINSON, Deputy Inspector
General
82
Federal Reserve Bulletin • August 2000
Federal Open Market Committee
and Advisory Councils
FEDERAL OPEN MARKET
COMMITTEE
MEMBERS
ALAN GREENSPAN,
WILLIAM J. MCDONOUGH, Vice
Chairman
Chairman
J. ALFRED BROADDUS, JR.
JACK G U Y N N
LAURENCE H . MEYER
ROGER W . FERGUSON, JR.
JERRY L. JORDAN
ROBERT T. PARRY
EDWARD M . GRAMLICH
EDWARD W . KELLEY, JR.
ALTERNATE MEMBERS
THOMAS M . HOENIG
MICHAEL H . MOSKOW
CATHY E . MINEHAN
WILLIAM POOLE
JAMIE B . STEWART, JR.
STAFF
DONALD L. KOHN, Secretary
and
Economist
NORMAND R.V. BERNARD, Deputy
Secretary
LYNN S. FOX, Assistant
Secretary
GARY P. GILLUM, Assistant
Secretary
J. VIRGIL MATTINGLY, JR., General
Counsel
THOMAS C. BAXTER, JR., Deputy General
Counsel
KAREN H . JOHNSON,
Economist
DAVID J. STOCKTON,
Economist
JACK H. BEEBE, Associate
Economist
CHRISTINE M . CUMMING, Associate
Economist
ROBERT A . EISENBEIS, Associate
Economist
MARVIN S. GOODFRIEND, Associate
Economist
DAVID H. HOWARD, Associate
Economist
DAVID E. LINDSEY, Associate
Economist
VINCENT R. REINHART, Associate
Economist
THOMAS D . SIMPSON, Associate
Economist
MARK S. SNIDERMAN, Associate
Economist
PETER R. FISHER, Manager,
FEDERAL ADVISORY
System
Open Market
COUNCIL
DOUGLAS A . WARNER III,
NORMAN R. BOBINS, Vice
President
President
NORMAN R. BOBINS, S e v e n t h District
KATIE S. WINCHESTER, E i g h t h District
R. SCOTT JONES, N i n t h District
C. Q. CHANDLER, Tenth District
RICHARD W. EVANS, JR., E l e v e n t h District
WALTER A . DODS, JR., T w e l f t h District
LAWRENCE K. FISH, First District
DOUGLAS A . WARNER III, S e c o n d District
RONALD L. HANKEY, Third District
DAVID A . DABERKO, Fourth District
L. M . BAKER, JR., Fifth District
WILLIAM G. SMITH, JR., S i x t h District
Account
JAMES ANNABLE,
WILLIAM J. KORSVIK,
Co-Secretary
Co-Secretary
A83
CONSUMER ADVISORY
COUNCIL
DWIGHT GOLANN, Boston, Massachusetts, Chairman
LAUREN ANDERSON, N e w Orleans, Louisiana, Vice
Chairman
WALTER J. BOYER, Dallas, Texas
DOROTHY BROADMAN, San Francisco, California
TERESA A. BRYCE, St. Louis, Missouri
MALCOLM M. BUSH, Chicago, Illinois
ROBERT M. CHEADLE, Ada, Oklahoma
MARY ELLEN DOMEIER, N e w ULM, Minnesota
JEREMY D. EISLER, Biloxi, Mississippi
ROBERT F. ELLIOTT, Prospect Heights, Illinois
LESTER W. FIRSTENBERGER, Middletown, Connecticut
JOHN C. GAMBOA, San Francisco, California
VINCENT J. GIBLIN, West Caldwell, N e w Jersey
KARLA S. IRVINE, Cincinnati, Ohio
WILLIE M. JONES, Boston, Massachusetts
M. DEAN KEYES, St. Louis, Missouri
THRIFT INSTITUTIONS ADVISORY
GWENN S. KYZER, Allen, Texas
JOHN C. LAMB, Sacramento, California
ANNE S. LI, Trenton, N e w Jersey
MARTHA W. MILLER, Greensboro, North Carolina
DANIEL W. MORTON, Columbus, Ohio
JEREMY NOWAK, Philadelphia, Pennsylvania
MARTA RAMOS, San Juan, Puerto R i c o
DAVID L. RAMP, St. Paul, Minnesota
RUSSELL W. SCHRADER, San Francisco, California
ROBERT G. SCHWEMM, Lexington, Kentucky
DAVID J. SHIRK, Tarrytown, N e w York
GARY S. WASHINGTON, Chicago, Illinois
ROBERT L. WYNN, II, Madison, W i s c o n s i n
COUNCIL
F. WELLER MEYER, Falls Church, Virginia, President
THOMAS S. JOHNSON, N e w York, N e w York, Vice
President
JAMES C. BLAINE, Raleigh, North Carolina
LAWRENCE L. BOUDREAUX III, N e w Orleans, Louisiana
TOM R. DORETY, Tampa, Florida
BABETTE E. HEIMBUCH, Santa Monica, California
WILLIAM A. LONGBRAKE, Seattle, Washington
CORNELIUS D. MAHONEY, Westfield, Massachusetts
KATHLEEN E. MARINANGEL, McHenry, Illinois
ANTHONY J. POPP, Marietta, Ohio
MARK H. WRIGHT, San Antonio, Texas
CLARENCE ZUGELTER, Kansas City, Missouri
84
Federal Reserve Bulletin • August 2000
Federal Reserve Board Publications
For ordering
assistance,
write P U B L I C A T I O N S S E R V I C E S ,
M S - 1 2 7 , Board of Governors of the Federal Reserve System,
Washington, D C 2 0 5 5 1 , or telephone (202) 4 5 2 - 3 2 4 4 , or F A X
( 2 0 2 ) 7 2 8 - 5 8 8 6 . You may also use the publications
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form
available
on the Board's
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(http://www.federalreserve.gov). When a charge is indicated,
payment should accompany
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BOOKS
AND
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EDUCATION
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Short pamphlets
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available without
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use. Multiple
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are
Consumer Handbook o n Adjustable Rate Mortgages
Consumer Handbook to Credit Protection L a w s
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Series on the Structure of the Federal Reserve
System
The Board of Governors of the Federal Reserve S y s t e m
The Federal Open Market Committee
Federal Reserve Bank Board of Directors
Federal Reserve Banks
A Consumer's Guide to Mortgage Lock-Ins
A Consumer's Guide to Mortgage Settlement Costs
A Consumer's Guide to Mortgage Refinancings
H o m e Mortgages: Understanding the Process and Your Right
to Fair Lending
H o w to File a Consumer Complaint about a Bank
Making S e n s e of Savings
SHOP: The Card You Pick Can Save You M o n e y
W e l c o m e to the Federal Reserve
W h e n Your H o m e is on the Line: What You Should K n o w
About H o m e Equity Lines of Credit
K e y s to Vehicle Leasing
Looking for the Best Mortgage
A85
STAFF STUDIES: Only Summaries Printed in the
BULLETIN
Studies and papers on economic and financial subjects that are of
general interest. Requests to obtain single copies of the full text or
to be added to the mailing list for the series may be sent to
Publications
Services.
Staff Studies 1 - 1 5 8 , 161, 163, 165, 166, 168, and 169 are out of
print.
1 6 4 . THE
1989-92
CREDIT
CRUNCH
FOR REAL ESTATE,
by
James T. Fergus and John L. Goodman, Jr. July 1993.
20 pp.
1 6 7 . A SUMMARY OF MERGER PERFORMANCE STUDIES IN B A N K ING, 1 9 8 0 - 9 3 , AND AN ASSESSMENT OF THE "OPERATING
PERFORMANCE" AND "EVENT STUDY" METHODOLOGIES,
by Stephen A. Rhoades. July 1994. 37 pp.
1 7 0 . THE COST OF IMPLEMENTING CONSUMER FINANCIAL REGULATIONS: A N ANALYSIS OF EXPERIENCE WITH THE TRUTH
IN SAVINGS ACT, b y G r e g o r y E l l i e h a u s e n and Barbara R.
Lowrey, December 1997. 17 pp.
1 5 9 . N E W DATA ON THE PERFORMANCE OF NONBANK SUBSIDIARIES OF BANK HOLDING COMPANIES, b y N e l l i e L i a n g a n d
Donald Savage. February 1990. 12 pp.
1 6 0 . BANKING MARKETS AND THE USE OF FINANCIAL SERVICES BY SMALL AND MEDIUM-SIZED BUSINESSES, b y
Gregory E. Elliehausen and John D. Wolken. September
1 9 9 0 . 35 pp.
1 6 2 . EVIDENCE ON THE SIZE OF BANKING MARKETS FROM MORTGAGE LOAN RATES IN TWENTY CITIES, b y S t e p h e n A .
Rhoades. February 1992. 11 pp.
1 7 1 . THE COST OF B A N K REGULATION: A REVIEW OF THE EVI-
DENCE, by Gregory Elliehausen, April 1998. 35 pp.
1 7 2 . USING SUBORDINATED DEBT AS AN INSTRUMENT OF MAR-
KET DISCIPLINE, by Study Group on Subordinated Notes
and Debentures, Federal Reserve System, December 1999.
6 9 pp.
1 7 3 . IMPROVING PUBLIC DISCLOSURE IN BANKING,
by
Study
Group on Disclosure, Federal Reserve System, March 2000.
3 5 pp.
86
Federal Reserve Bulletin • August 2000
Maps of the Federal Reserve System
LEGEND
Both pages
• Federal Reserve Bank city
• Board of Governors of the Federal
Reserve System, Washington, D.C.
Facing page
• Federal Reserve Branch city
— Branch boundary
NOTE
The Federal Reserve officially identifies Districts by number and Reserve Bank city (shown on both pages) and by
letter (shown on the facing page).
In the 12th District, the Seattle Branch serves Alaska,
and the San Francisco Bank serves Hawaii.
The System serves commonwealths and territories as
follows: the N e w York Bank serves the Commonwealth
of Puerto Rico and the U.S. Virgin Islands; the San Francisco Bank serves American Samoa, Guam, and the Commonwealth of the Northern Mariana Islands. The Board of
Governors revised the branch boundaries of the System
most recently in February 1996.
A87
2-B
1-A
3-C
4-D
5 - E
Pittsburgh
Mb
VT
WV
NH
cinnati
Bill I aid
MA
„
D 1 .
Baltimore
MD
•Charlotk
I
®
^
N Y
NJ
R1
BOSTON
N E W YORK
6-F
KY
PHILADELPHIA
RICHMOND
CLEVELAND
7-G
8-H
TN—©Nashville
KY
BirminghamDetroit©
IA
AR
LA
- TN
L
•
Memphis
fe'Jf -
Now Orleans
ATLANTA
9-1
Lf^iisville
MO
S T . LOUIS
CHICAGO
Ml
ND
• I
•
T
MINNEAPOLIS
12-L
10-J
Oklahoma Cit\
OK
KANSAS CITY
11-K
• \ •
S.m '\nionio
AZ
DALLAS
S A N FRANCISCO
88
Federal Reserve Bulletin • August 2000
Federal Reserve Banks, Branches, and Offices
FEDERAL RESERVE BANK
branch, or facility
Zip
Chairman
Deputy Chairman
President
First Vice President
BOSTON*
02106
William C. Brainard
William O. Taylor
Cathy E. Minehan
Paul M. Connolly
NEW YORK*
10045
Peter G. Peterson
Charles A. Heimbold, Jr.
Bal Dixit
William J. McDonough
Jamie B. Stewart, Jr.
Buffalo
14240
Carl W. Turnipseed 1
PHILADELPHIA
19105
Joan Carter
Charisse R. Lillie
Anthony Santomero
William H. Stone, Jr.
CLEVELAND*
44101
Jerry L. Jordan
Sandra Pianalto
Cincinnati
Pittsburgh
45201
15230
David H. Hoag
To be announced
George C. Juilfs
John T. Ryan, III
RICHMOND*
23219
J. Alfred Broaddus, Jr.
Walter A. Varvel
Baltimore
Charlotte
21203
28230
Jeremiah J. Sheehan
Wesley S. Williams, Jr.
George L. Russell, Jr.
Joan H. Zimmerman
John F. Wieland
Paula Lovell
D. Bruce Carr
William E. Flaherty
Karen Johnson-Street
Frances F. Marcum
Dwight H. Evans
Jack Guynn
Patrick K. Barron
Arthur C. Martinez
Robert J. Darnall
Timothy D. Leuliette
Michael H. Moskow
William C. Conrad
Susan S. Elliott
Charles W. Mueller
Diana T. Hueter
J. Stephen Barger
Mike P. Sturdivant, Jr.
William Poole
W. LeGrande Rives
James J. Howard
Ronald N. Zwieg
William P. Underriner
Gary H. Stern
James M. Lyon
Jo Marie Dancik
Terrence P. Dunn
Kathryn A. Paul
Larry W. Brummett
Gladys Styles Johnston
Thomas M. Hoenig
Richard K. Rasdall
Roger R. Hemminghaus
H. B. Zachry, Jr.
Beauregard Brite White
Edward O. Gaylord
Patty P. Mueller
Robert D. McTeer, Jr.
Helen E. Holcomb
Gary G. Michael
Nelson C. Rising
Lonnie Kane
Nancy Wilgenbusch
Barbara L. Wilson
Richard R. Sonstelie
Robert T. Parry
John F. Moore
ATLANTA
Birmingham
Jacksonville
Miami
Nashville
N e w Orleans
30303
35283
32231
33152
37203
70161
CHICAGO*
60690
Detroit
48231
ST. LOUIS
63166
Little Rock
Louisville
Memphis
72203
40232
38101
MINNEAPOLIS
55480
Helena
K A N S A S CITY
Denver
Oklahoma City
Omaha
DALLAS
El Paso
Houston
San Antonio
59601
64198
80217
73125
68102
75201
79999
77252
78295
S A N FRANCISCO
94120
Los Angeles
Portland
Salt Lake City
Seattle
90051
97208
84125
98124
Vice President
in charge of branch
Barbara B.Henshaw
Robert B. Schaub
William J. Tignanelli 1
Dan M. Bechter 1
James M. McKee
Andre T. Anderson
Robert J. Slack
James T. Curry III
Melvyn K. Purcell 1
Robert J. Musso 1
David R. Allardice 1
Robert A. Hopkins
Thomas A. Boone
Martha Perine Beard
Samuel H. Gane
Carl M. Gambs 1
Kelly J. Dubbert
Steven D. Evans
Sammie C. Clay
Robert Smith, III 1
James L. Stull 1
Mark L. Mullinix 1
Raymond H. Laurence 1
Andrea P. Wolcott
Gordon R. G. Werkema 2
* Additional offices of these Banks are located at Windsor Locks, Connecticut 06096; East Rutherford, New Jersey 07016; Utica at Oriskany, New York 13424;
Columbus, Ohio 43216; Columbia, South Carolina 29210; Charleston, West Virginia 25311; Des Moines, Iowa 50306; Indianapolis, Indiana 46204; Milwaukee,
Wisconsin 53202; and Peoria, Illinois 61607.
1. Senior Vice President.
2. Executive Vice President
@FedFRASER